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Why shareholder voting is not a duty but a right?

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  1. Outline of the study
  2. On how the idea of duty appeared in civil law in connection with voting
  3. The reasons why voting is a right
  4. The duty to vote
  5. The duty to vote in good faith
  6. Conclusion

Paradoxically, we daresay, most part of the contemporary continental literature on company law refers to the shareholder's right to vote, but treats vote as a duty. Perhaps a reminiscence of the traditional approach to companies, voting is instinctively placed near such other corporate rights as the right to be informed or to receive dividends, but is afterwards denied its nature of a right and is transformed into a duty.

This line of thought finds its ultimate expression in certain countries in laws that have imposed an obligation on all companies managing UCITS to exercise their voting rights in the general meetings of the managed undertakings. Take, for instance, the case of Art. L. 533-4 of the Financial Security Law of France, that obliges portfolio management companies to ?[e]xercise the rights attached to the securities held by the undertakings for collective investment in transferable securities which they manage, in the exclusive interest of the shareholders or unitholders of those undertakings for collective investment in transferable securities, and report on their practices in regard to exercise of the voting rights as determined in the General Regulations of the Financial Markets Authority. In particular, if they do not exercise those voting rights, they shall explain their reasons to the unitholders or shareholders of the undertakings for collective investment in transferable securities?.

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