Christoph Van der Elst

Shareholders as Stewards: Evidence from Belgian General Meetings

WP 2013-05

Shareholder activism is at the heart of the corporate governance debate. This study investigates shareholder activism through the voting turnout as well as the voting behavior of large and small shareholders and the resolutions voted at annual general meetings (AGMs) of Belgian listed companies.

The mean voting turnout was 56.0 per cent in 2012, up from 49.9 per cent in 2011. The attendance of small shareholders is significantly lower at 20.4 per cent, providing evidence that large shareholders control de facto almost 80 per cent of all Belgian listed entities.

Opposition is generally low while dissent for the remuneration report and for some director elections is higher. When small shareholder approval rates would be taken in consideration, several board proposals would have been defeated, including almost 20 per cent of the remuneration reports. Similarly, almost 10 per cent of the candidate directors are not supported by a majority of the small shareholders. However, all directors were (re)elected due to the majority position of the blockholders at Belgian AGMs.

As the important decision taking body, we recommend reforming the position of the AGM providing in better stewardship. The role of the AGM should be oriented towards a discussion platform between board and different types of shareholders for eg. policy making rather than its present function of formal decision making body. We end with policy recommendations to enhance the role of the AGM and empower the AGM for taking for policy decisions.