Today, shareholders play an important role in companies, and shareholder activism is widely encouraged in the European Union. However, a certain form of shareholder activism is best avoided as it could be classified as an illicit form of behaviour, namely acting in concert, and engender severe consequences.
Differences in the definition of concerted action in EU law and the national laws of the Member States have generated uncertainty for shareholders and might lead to a reluctance on the part of shareholders to engage in certain forms of investment and cooperation. Particularly in the Grand Duchy of Luxembourg, where shareholder activism is to our best knowledge, not standard practice, it is important to clarify the situation in order to promote sound corporate governance.
This article explains the difficulties inherent in distinguishing between shareholder activism and acting in concert, before presenting the various definitions of these concepts found in EU directives and in Luxembourg law.
The article is available on the Wolters Kluwer website for subscribers.
Source: ACE Review – May 2020