Below are key takeaways from ISS’ recently released 2025 Proxy Season Review: Continental Europe. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Knowledge Center and its Library tab and to corporate subscribers by logging into Compass then selecting Governance and the Governance Library or Governance Exchange tab.
- European Competitiveness Takes Center Stage
- The EU has shifted its focus from sustainability to competitiveness, launching a €451 billion Competitiveness Fund and reviewing ESG regulations (CSRD, CSDDD, EU Taxonomy).
- Diverging voting rights and capital access reforms in Italy, France, and the Netherlands are challenging traditional governance norms.
- Sustainability Reporting Amid Regulatory Uncertainty
- Despite delays in CSRD transposition by several member states, most companies published CSRD-aligned reports with third-party assurance.
- Notable compliance was observed in the Netherlands and Germany, even absent legal mandates.
- Diversity and DEI Under Pressure
- Gender diversity improved, particularly in Eastern Europe, due to the Women on Boards (WOB) Directive.
- The U.S. executive order on diversity, equity, and inclusion (DEI) led European firms with US exposure—such as SAP, Arcadis, and Aegon—to scale back diversity targets and adopt merit-based language.
- Executive Compensation Scrutinized
- Growing trends in benchmarking against U.S. peers have led to shareholder dissent in the Nordic and Benelux regions.
- Mega incentive grants (e.g., JDE Peets, Aercap) and controversial packages (e.g., Stellantis, BioNTech) raised concerns regarding pay levels and governance alignment.
- Meeting Formats and Shareholder Rights Debates
- Germany leads in the adoption of virtual-only AGMs (36%), sparking shareholder dissent.
- Italy faces EU infringement proceedings for restricting proxy rights through closed-door AGMs.
- Dutch legislation concerning digital AGMs is delayed but progressing, with companies beginning to outline protocols for virtual meetings.
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: ISS European Research
