AMF releases proposals for French General Meetings

The AMF has this week (2nd July) released its final report on improving the exercise of shareholders rights at French general meetings.  Following consultation during 2011, the proposals are expected to be in place in time for meetings on or after 1st January 2013, subject to the adoption of legislative amendments where necessary. Interestingly, elaboration of some aspects of best practices are to be achieved by issuers and investor bodies together. It touches on four topics, of which two are of particular direct interest to Manifest as a facilitator of enhanced stewardship engagement and voting.

The proposals ar emore wide ranging than the title might suggest, including as one of its four sections provisions relating to dialogue between shareholders and companies which will be welcomed by domestic and foreign active shareholders alike.  Formal provision for year-round dialogue to promote better understanding of points of view will surely be well received. It will likely become easier for shareholders to table items for discussion or vote, with the potential to relax shareholding requirements and the scope of issues permtted for proposal.

However, the greatest development is in the field of information provision, in terms of future AGM dates up to two years in advance, clearer explanation of resolution items (avoiding repetition of dry legalese) and  more consistent provision of information on items to be proposed. Foreign shareholders will welcome the availability of English language meeting materials, and would appreciate such materials being provided at the same time as the French originals, especially when facilitated by an IR officer dedicated to relations with foreign shareholders.  It should not be problematic for issuers to provide the results of the meeting in a more timely fashion than the 2 months stipulated.

Improvement of the practical aspects of the voting process will in particular strengthen the ability of foreign shareholders to have more confidence in a voting process that should become far less bureaucratic. These will iclude better publication of information about the voting process, electronic instruction processes, confirmation of votes cast. We welcome the permission of electronic voting; but we certainly caution about creating an additional hoop in the process by mandating the use of a new electronic platform into which everyone must insert their votes, not least when there are perfectly capable systems already in existence which could be deployed immediately. We would urge the AMF to address this by the creation of open standards for the electronic instruction of votes rather than the creation of a central platform.

It is clear that the AMF has carefully weighed the responses received during the consultation process, and intends to continue in this spirit by involving both issuers and investors in the rolling out of the new rules. We hope that the AMF and its stakeholders set a challenging positive example by enshrining open standards and thereby facilitating a genuinely open market for voting services.

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