Shareholders’ Duty to Disclose
Published in Shareholders’ Duties, Hanne S. Birkmose (ed.), Kluwer Law International, 2017
25 Pages Posted: 12 Feb 2018
Date Written: 2017
In a partnership there will often be close interaction between the partners and the partnership, as the partners are usually directly involved in the business. For this reason it is often assumed that a partner has a duty to provide the partnership and the other partners with the information necessary for the conduct of the joint business.In contrast, companies’ shareholders are not assumed to be directly involved in the business of the company, only exercising more limited influence via the general meeting. As a consequence shareholders have historically been allowed to remain anonymous, and have not been assumed to have a duty of loyalty that could trigger a duty to inform. However, this picture is no longer accurate as shareholders do have duties to disclose various kinds of information. This is clearly the case in listed companies where, at an early stage, the need to ensure an efficient market led to some shareholders having disclosure duties. Later, such duties have also been introduced to allow for better governance. This development will be discussed in §14.02. The rules imposing disclosure duties on shareholders have also evolved in other ways; these developments will be addressed in §§14.03-14.05. First there is a focus on the question of whom the duty is imposed on, then on how the information should be disclosed and finally on how the duty is enforced. The course of these developments will be analysed and it will be shown that the reasons for them can only partly be explained by the development discussed in §14.02.
The focus is on European companies, so the starting point will be the EU rules. Where there has been no EU harmonization, a comparative element is included to show different solutions in national law. Here Danish, German and English law will primarily be used, but there will also be reference to international standards such as the G20/OECD Principles of Corporate Governance, as updated in 2015.3 The focus is on public companies (listed and non-listed). The special rules applicable to financial institutions are not dealt with.
Keywords: Shareholder, duties, disclosure
JEL Classification: K22
Suggested Citation: Suggested Citation