Shareholder Rights and Responsibilities in the Context of Corporate Social Responsibility

Abstract

In this article the authors reflect in more detail on shareholder rights and responsibilities, highlighting two recent developments that could give rise to further debate, namely: shareholder’s activist conduct in the general meetings of systemic enterprises and shareholder responsibility as to voting without having an economic interest in the company in which the votes are casted (“empty voting”). Empty voting is problematic in that it allows parties to vote who do not or to a small extent bear the ultimate risk of a company. In doing so, it blurs the traditional ratio along the lines of which the shareholders are the ultimate risk bearers in a company and best placed to assess what is in the interest of the company. More in general, shareholder activism may have negative consequences for the target company, for example when activism leads to a higher risk profile of the target company. Rather than curtailing the shareholder rights, the authors plea for greater shareholder involvement in the decision-making of a (systemic) company as a counterbalance against aggressive activists.