Buhlmann's Corner

Quo vadis shareholder democracy

https://www.rimini-protokoll.de/website/de/project/hauptversammlung

https://www.rimini-protokoll.de/website/de/text/wenn-die-daimler-hauptversammlung-zum-theater-wird

«En un lugar de la Mancha, de cuyo nombre no quiero acordarme, no ha mucho tiempo que vivía un hidalgo de los de lanza en astillero, adarga antigua, rocín flaco y galgo corredor.»

In a village of La Mancha, the name of which I have no desire to call to mind, there lived not long since one of those gentlemen that keep a lance in the lance-rack, an old buckler, a lean hack, and a greyhound for coursing.

First sentence of the novel, translated by John Ormsby

For many years, Germany was a role model regarding general meetings, building on the 1965 reform of company law. For many European countries, these regulations came later with the Shareholders' Rights Directive 2007/36/EC. Some did not even reach the growing democratic era because they jumped straight into the oligopoly world of American voting rights advisors: brave new world.

If shareholder democracy used to be physical and often enough governed by trial-and-error, today both medicine and epidemic have made it bloodless. It becomes a joke when "papers" are exchanged in advance and then virtually combined into minutes through one-way recitations. If the people were consistent, they would collect the electric papers in the notary's office and have them professionally read out there.

Kept away from the scene, the squires take refuge in an imaginary world. With the contact drug of the 1 to 1, they are lured into the back rooms of the stock corporations, where they are allowed to leave the data cloud for a few moments and take a seat at the table. Transparency thus only takes place in theory. To numb the omnipresent conflict of interest, so-called "capital market days" are regularly celebrated as a substitute, where representatives come together, similar as in the cooperative system. The mere fact that they are delegated to such meetings is already suspicious of conflict.

Just as years ago Daimler AG's AGM in the all-black Cube in Berlin even served as a theatre play, the face-2-face shareholder meetings with issuers remain a black box. Right, then not only contestation (a quintessentially German topic, by the way) is mentally ruled out, but also what can be called democracy becomes astronomically remote.

The first time it was done spontaneously (Bayer HV 2020ff), the next time it was prolonged and, because of the Bundestag elections in Germany, it renewed or, more correctly, delayed again. What works three times has tradition, that's how things are on the Rhine, the Isar and the Spree.

As the creator of the (German) virtual AGM Prof. Ulrich Seibert said: let's do this for now and then we'll have a look at it. It will remain a "pure emergency law (...); this will not be a blueprint for general company law afterwards in normal times. Our main focus had to be that in this crisis situation, (...), general meetings can be conducted in a reasonably legally secure manner."

Reality has overtaken him.

What else needs to happen after 9/11, after an oil price crisis, after a pandemic, but also after more than 50 years of the Club of Rome, for responsibility and/or sustainability to be put into practice?

There rides the Spanish nobleman of La Mancha on a hungry horse, protected from blows only by Sancho Panza.

Unfortunately, one thing is certain: Don Quijote's next adventure is sure to come.