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This chapter investigates which factors contribute to (small) shareholder attendance using a hand-collected panel data set with information about turnout rates, voting behaviour and ownership structures of companies that are listed in seven Member States. We document how ownership concentration positively affects total shareholder turnout, but has a negative effect on small shareholder turnout. Voting power also affects small shareholder turnout rates; the greater small shareholder voting power, the greater their eagerness to vote. In addition, total and small shareholder turnout is higher the more important the meeting agenda. And, small shareholders tend to free-ride on large institutional shareholders and corporate insiders, but the magnitude of the free-rider effect is larger for the latter category of blockholders. Our results provide some important insights for the debate on shareholder rights and the role of the AGM in corporate governance. The results show that, despite the criticism, the AGM still plays an important role in small shareholder monitoring. Some topics seem to clearly motivate small shareholders to attend, while others are less relevant. Policy makers can stimulate shareholder monitoring by focusing on the factors that are determined in this study, but it is important to consider possible endogeneity issues as well.

We examine the perceived influence of externally generated firm ratings of corporate social responsibility (CSR) on voting for shareholder-sponsored CSR proposals. Using stakeholder and legitimacy theories, we introduce two rationales that relate shareholder voting decisions to the firm’s CSR performance: the complementary perspective where investors rely on management’s branding or image of the firm for CSR performance, and the sufficiency perspective where shareholders consider legitimacy effects of firm CSR performance. Our examination of 473 CSR shareholder-sponsored proposals during the 2013 to 2015 proxy seasons reveals a negative relationship between support for shareholder-sponsored CSR proposals and CSR strengths, particularly for social and environmental CSR strengths. We also find a positive relationship between support for shareholder-sponsored CSR proposals and CSR concerns, particular in the area of environmental CSR concerns. These results partially support the sufficiency perspective that incorporates shareholder legitimacy concerns. When companies have poor CSR performance, shareholders may view further CSR initiatives as beneficial to the firm.

In this chapter, we assess the ownership characteristics for the companies in our sample. For this, we do not only use ownership concentration measures such as the Herfindahl–Hirschman index but also voting power measures since ownership and voting power are not necessarily equivalent. We find that, in line with previous studies, ownership concentration and voting power of large shareholders is generally higher in continental European countries, which has important implications for corporate governance.

Blockholders can behave opportunistically because small shareholder voting suffers from coordination problems. In this chapter, we investigate the features of small shareholder voting using a theoretical framework. Specifically, we investigate when defeating a blockholder’s resolution is optional for shareholders. Regulatory initiatives that facilitate communication between small shareholders or focus on institutional investors and corporate governance tools that alter or add the threshold in the voting game also contribute to solving the coordination problem. These corporate governance initiatives can increase the relevance of AGMs in Europe.

Since we have seen in the previous chapter that only small part of the shareholder rights is harmonized at the European level, we explore the national regulations in this and the subsequent chapter. In this chapter, we focus in particular on procedural and information rights, including the organization of the meeting, forum rights and the disclosure of ownership information. We find that, inter alia, there are many differences in the national provisions regarding shareholder forum rights, despite article 9 of the Shareholder Rights Directive that provides shareholders with the right to ask questions. Also in the meeting’s organization there are large differences between countries, for example, regarding the use of EGMs.

In this chapter, we assess shareholder voting behaviour in our sample of seven European Member States. We consider the AGM’s agenda, shareholder proposals, rejected voting items and dissent rates. Our research shows, inter alia, that certain voting items receive higher dissent rates than others. These are, for instance, director elections and say-on-pay resolutions. Other voting items, such as the approval of the annual accounts, are merely a formality.

In this part of the research, we consider the costs of the turnout decision and evaluate whether the introduction of the Shareholder Rights Directive (2007/36/EC), which aimed at lowering voting costs, has had a positive impact on (small) shareholder attendance. For this, we investigate turnout rates in Belgium, France and the Netherlands. We find strong indications that the Shareholder Rights Directive indeed had a positive impact on (small) shareholder attendance in these countries. The findings of this study may encourage policy makers to further reduce the costs of (cross-border) voting. It shows that the introduction of the new Shareholder Rights Directive may contribute to (small) shareholder engagement.

In this part of the book, we investigate the practical characteristics of AGMs in an extensive empirical analysis. For this, we consider the turnout rates of AGMs of seven European Member States between 2010 and 2014 in this chapter. We show that, although there are large differences in total and small shareholder turnout rates among Member States, there is an overall increasing trend in the 2010–2014 period. In contrast to what economic theory predicts, a substantial and increasing part of small shareholders actually participate in AGMs.

In the previous chapters of this part, we considered voter turnout, ownership concentration and voting behaviour of shareholders. In this chapter, we take a closer look at the types of shareholders that are present in our data set. We define five different types of shareholders and evaluate their stakes. Afterwards, we consider outsider shareholder voting behaviour and find that, when only considering these shareholders, dissent rates are significantly higher. These findings imply that it may be desirable for continental European countries to consider a rule like UK Listing Rules 9.2.2AR to ER.