Abstract
This study provides data on the attendance of shareholders and voting behaviour in listed Belgian companies between 1994 and 2003. It empirically analyses the relationship between the size of the corporation, the ownership structure and the attendance rate and describes some of the voting issues tackled at the general meeting. Further, the article presents the regulatory evolution of general meetings since 1994 and analyses whether the legal reforms have significantly influenced the attendance behaviour of shareholders.
On average, 57.2% of the shares were represented at the ordinary general meeting. The total stake of identified shareholders and the stake of the concert parties positively influence the attendance. The average number of shareholders attending the meeting is 38. The size of the corporation and the number of concert parties significantly increase the number of attending shareholders.
The number of attending shareholders increased significantly between 1994 and 2003, while the attendance rate did not. The idea and importance of shareholder activism seem to trickle through, but the patterns that determine corporate policy have not changed. Small shareholders have the opportunity to ventilate their opinions, but the controlling shareholder and the board of directors make the decisions.
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References
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The Deminor agency gathers information. It focuses on the protection of minority shareholders. For an analysis of voting procedures, votes cast and shareholder issues, see T. Baums and E. Wymeersch, Shareholder Voting Rights and Practices in Europe and the United States (The Hague, Kluwer Law International 1999). From this research it is clear that empirical data on the attendance of shareholders and voting at general meetings is (publicly) available in only a limited number of countries.
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An index of the 100 most important British listed companies.
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The Department of Trade and Industry is a British government authority that supports ministers in their duties.
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In that case, the first general meeting requires a quorum of 50% of the subscribed capital, and the second meeting requires the attendance of one shareholder holding one share. Decisions require a majority of 80%.
As above, but decisions require a majority of 75%.
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In this study, voting turnout and attendance are identical. Voting turnout is the sum of all votes cast, including abstentions. Shareholders attending the meeting can only vote for or against or abstain.
Formerly De Financieel Economische Tijd.
When the chairman of the general meeting opens the meeting, he informs the shareholders of the number of attending shareholders as well as the number of votes they represent. Journalists report this data. It may therefore be assumed that the information in the newspapers is reliable.
This number is used as a denominator to determine the voting turnout.
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Belgian law allows companies to lower the first threshold in the articles of incorporation to 3%.
Art. 562 of the Belgian Companies Code.
Arts. 523 and 524 of the Belgian Companies Code.
The board of directors and the auditor, if the latter’s report is discussed, must attend. Bond-holders and holders of certificates issued with the consent of the company are allowed to attend. The general meeting decides autonomously whether others can attend. Only shareholders can vote. Some of the others have an ‘advisory vote’, that is to say, a right to be heard.
Cf. infra.
The other results are on file with the author.
If only direct shareholders have disclosed information, the largest direct stake has been used in the third column.
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The results of the regression analysis of the transformed dependent variable are on file with the author but do not differ from the results presented.
In contrast to extraordinary general meetings, for which the list of participants has to be publicly disclosed, information on the attendance at ordinary general meetings is not publicly available.
In 43 cases (61%).
Most listed companies have issued bearer shares. The articles of incorporation almost always require shareholders to deposit the shares before the general meeting in order to prove the ownership of the bearer shares.
Although unlikely, it could be that these shareholders use other means.
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The bank is no longer listed on the stock exchange.
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Art. 549 of the Belgian Companies Code.
Art. 562 of the Belgian Companies Code.
The number of votes the largest shareholder could cast was reduced to 40% of the total number of shares represented at the general meeting.
Abolished in 1995.
Art. 480 of the Belgian Companies Code.
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Art. 513 of the Belgian Companies Code.
Art. 524 of the Belgian Companies Code.
One out of eleven companies reported that it had applied this procedure in 2000. C. Van der Elst, ‘Corporate governance: de huidige praktijk’, presentation for the Institute for International Research, Antwerp, 17 April 2002, slide 17.
Art. 526(3) of the Belgian Companies Code.
Art. 526(4) of the Belgian Companies Code.
Art. 533 of the Belgian Companies Code.
Thirteen (18%) of listed companies that have organised an extraordinary general meeting to modify their articles of incorporation (71 meetings have been registered in the analysis) have introduced the possibility of using the record date. It remains unclear whether these companies will effectively offer this feature to shareholders, as in a number of cases the articles of incorporation only refer to Art. 536 of the Belgian Company Law, which states that a record date can be used.
A new Corporate Governance Commission was established in January 2004. It will issue a new corporate governance code to replace the three existing codes. For more information, see <http://www.corporategovernancecommittee.be>.
These codes can be found at: <http://www.ecgi.org/code/index.htm>.
Appendix B contains a summary of the differences between the two smaller samples.
Table 6 indicated the significantly positive relationship between size and number of attending shareholders. A regression analysis with the 1994 data confirms the 2003 result. The 1994 regression function is: Log (attending shareholders) = −1, 762 + 0,352 log (size) (R2:0,462; F: 54,9; N: 64) (4,552)* (7,410)* The paired difference procedure for size confirmed the increase of the common companies in the two datasets. However, the results were not significant.
The Dutch study also found that the dividend yield is negatively related to the voting turnout. Shareholders attend if the company is underperforming.
C. Van der Elst, ‘Corporate governance: de huidige praktijk’, presentation for the Institute for International Research, Antwerp, 17 April 2002, slide 12.
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Van der Elst, C. Attendance of Shareholders and the Impact of Regulatory Corporate Governance Reforms: An Empirical Assessment of the Situation in Belgium. Eur Bus Org Law Rev 5, 471–510 (2004). https://doi.org/10.1017/S1566752904004719
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DOI: https://doi.org/10.1017/S1566752904004719