Well, a little bit of both it would appear, at least when it comes to empty voting:
Dutch law currently permits listed companies to set a voting record date (art. 2:117b (3) DCC). The voting record date cannot be set at an earlier date than 30 days prior the date of the shareholders meeting.
Last year, as part of a legislative proposal implementing the European Shareholders' Rights Directive, the Dutch minister of Justice proposed to fix the voting record date at 21 days prior to the date of the shareholders meeting for all listed companies.
Now, MP Ewout Irrgang, of the Socialist Party, argued that to counter the problem of empty voting (voting without corresponding economic interest), the period between the meeting and the voting record date should be longer than that, and proposed that the voting record date be fixed at 28 days instead.
Adjusting the voting record date to counter empty voting, sound familiar? In Delaware earlier this year, the General Corporation Law was also amended to counter empty voting, but in such a way that the period between the meeting and the voting record date can be made shorter - in fact, the voting record date can now be set at any date prior the shareholders' meeting (for a discussion of the amendment, see here).
What explains this difference in approach?
Irrgang's proposal is motivated as follows: (1) a voting record date makes it harder to borrow shares just prior to the meeting and engage in empty voting; (2) a voting record date enables lenders of shares to assess whether shares are borrowed merely for purposes of obtaining the voting rights (as opposed to dividend stripping); (3) the longer the voting record date, the stronger these effects.
By contrast, the Delaware legislature's proposal is motivated as follows: (1) the longer the period of time between the voting record date and the shareholders' meeting (in Delaware, this period can be up to 60 days), the more shareholders will have traded their shares and the less the population of investors entitled to vote will match the population of investors holding shares at the date of the shareholders meeting; (2) the shorter the voting record date, the smaller the risk of empty voting.
So, who's right? On a theoretical level, both are, to some extent. A long voting record date does enable institutional investors like pension funds to first vote their shares and subsequently lend them to dividend strippers (for how long this practice continues to be profitable remains to be seen, but that's a different issue). And a short voting record date does minimize the change in shareholder population.
On a practical level, however, I'm not so sure the changes will have much effect. For one thing, those who are determined to engage in empty voting can easily obtain voting rights without economic exposure through the use of derivatives instead of securities lending. Neither of the legislative proposals takes this into account. This suggests other measures may be necessary. The challenge, of course, is to design such measures and make sure they are proportional to the problem.
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