Greater shareholder engagement in listed companies

Shareholders of listed companies are to have more influence over the remuneration of the executive and supervisory board members. In addition, shareholders are to be provided with more information on the important transactions that a listed company concludes with affiliated parties, such as directors or major shareholders. Institutional investors such as pension funds and life insurance companies must draw up an engagement policy.

Shareholders of listed companies are to have more influence over the remuneration of the executive and supervisory board members. In addition, shareholders are to be provided with more information on the important transactions that a listed company concludes with affiliated parties, such as directors or major shareholders. Institutional investors such as pension funds and life insurance companies must draw up an engagement policy.
 
These key features are included in a legislative proposal submitted to the House of Representatives today by Minister for Legal Protection Sander Dekker and Minister of Finance Wopke Hoekstra. This legislative proposal enshrines the EU Directive as regards the encouragement of long-term shareholder engagement in Dutch law. The directive aims to increase the long-term engagement of shareholders in listed companies as well as to improve the transparency of institutional investors and listed companies.
 
New for the Netherlands is the requirement that the remuneration policy for directors must be resubmitted to shareholders every four years. Listed companies must also submit a remuneration report to shareholders on an annual basis. Among other things, listed companies must explain in the remuneration report how changes in the remuneration of directors compare with the remuneration of the average employee.
 
Also new is the fact that important transactions with parties related to the company must be approved by the supervisory board and made public. To encourage greater transparency about their investment strategy among institutional investors, they must develop a policy on how they will integrate shareholder engagement in the strategy. This policy must be made public.

Ministry responsible