Below are key takeaways from ISS’ recently released 2023 Continental Europe Proxy Review. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Governance Exchange and its Report Center tab and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.
- Climate-related proposals: Say-on-Climate proposals submitted in 2023 decreased from their 2022 peak, mainly due to fewer proposals filed in the UK. Progress report on climate transition strategy accounted for half of the Say-on-Climate votes. Overall, most company disclosures failed to provide investors a clear understanding of how the companies plan to reach the goals of the Paris Agreement. Meanwhile, several markets are taking steps to improve their regulatory frameworks, particularly in connection with the rollout of the Corporate Sustainability Reporting Directive (CSRD).
- Executive Remuneration: Although the second Shareholder Rights Directive (“SRD II”) has been implemented across Europe, executive compensation remained a key theme at European general meetings in 2023, with a number of high-profile cases of significant shareholder dissent. Some investors have also focused on executive compensation due to increased expectations surrounding the inclusion of ESG performance metrics linked to company strategy.
- Virtual meetings: In several markets, regulators have approved legislation concerning the future format of the general meeting, thus providing clarity following temporary provisions introduced in response to the pandemic. The trend across Europe is to approve legislation that allows for virtual-only general meetings, with certain exceptions.
- Russia-Ukraine war: Following the outbreak of war in Ukraine and the imposition of sanctions on Russian enterprises, the Russian Government implemented new rules allowing Russian companies to disregard the rights (including voting rights) of select foreign shareholders from so-called “unfriendly countries”.
If you are not a subscriber, please contact sales@iss-stoxx.com (for institutional investors) or contactus@isscorporatesolutions.com (for corporations) to learn more about accessing bespoke governance research.
By: European Governance Research
