From Shareholder Stewardship to Shareholder Duties : Is the Time Ripe?

In the context of the increasing institutionalisation of global equity, this chapter examines the development of the soft law of shareholder stewardship originating in the UK Stewardship Code and provides insights into its prospective evolution into hard law standards of behaviour for institutional shareholders. We argue that the time is ripe for the development of shareholder duties on the part of institutional investors. We contend that the proposed Shareholder Rights Directive is already taking a step towards that direction by introducing a semi-hard law of a fiduciary duty to demonstrate engagement at a pan-European level. We argue that such a duty is relevant to different European jurisdictions; even if ownership structures are still rather different across the EU there is a shifting balance between traditional blockholders, such as families, and institutional investors