Overview

This bill mandates that all public companies in the UK establish a Shareholders' Committee. This committee, elected solely by private shareholders, will act as a communication and consultation channel between the company's directors and its shareholders, aiming to improve transparency and accountability.

Description

The Protection of Shareholders Bill amends the Companies Act 2006. It requires every public company to create a Shareholders' Committee (SC) with 3-6 members elected by private shareholders (those who beneficially own their shares). The SC's role is to facilitate communication and consultation between directors and shareholders on important matters. The SC's actions must be independent of the directors. The bill outlines the committee's election process, meetings, and operation, including provisions for vacancies and resignation. Directors must nominate a representative to attend SC meetings (without voting rights) and receive SC reports, including minority opinions. Auditors, accountants, secretaries, and solicitors must report potential legal or fiduciary breaches to the SC. The company must provide the SC with resources for communication with shareholders.

Key Aspects:

• Mandates a Shareholders' Committee for all public companies.
• Committee elected solely by private shareholders.
• Focus on communication and consultation between shareholders and directors.
• Detailed provisions for committee composition, operation, and reporting.
• Requirement for company to facilitate communication for the committee.

Government Spending

The bill doesn't directly specify government spending figures. However, there will be an indirect cost to the government through the administrative burden of overseeing the implementation and enforcement of the new legislation. Additionally, companies will incur costs associated with establishing and operating the Shareholders' Committees. The exact financial implications will vary between companies.

Groups Affected

• Public Companies: Required to establish and fund the Shareholders' Committee, potentially impacting their administrative costs and operational structure.
• Private Shareholders: Given increased influence and a formal channel for communication with company directors, leading to potentially greater participation in company governance.
• Directors: Will need to interact with and provide information to the Shareholders' Committee, potentially impacting their workload and decision-making processes.
• Auditors, Accountants, Secretaries, Solicitors: Have a duty to report potential breaches to the committee.
• Government: Responsible for overseeing the implementation and enforcement of the bill.

Powered by nyModel