Shareholder Rights Directive (SRD II)

Background

The Shareholder Rights Directive II (Directive (EU) 2017/828, also known as SRD II) is a central pillar of the EU corporate governance framework. It aims to strengthen shareholder rights and encourage long‑term investor engagement in EU‑listed companies.

At its core, SRD II, building upon the original 2007 Directive, is about promoting corporate transparency and effective stewardship by empowering shareholders.

 

Objectives and key requirements

SRD II seeks to remove barriers to shareholder engagement and establishes key provisions to support this objective:

  • Shareholder identification: requires intermediaries to enable listed companies to identify their shareholders and to facilitate direct communication between companies and investors.
  • Facilitation of shareholder rights: aims to facilitate the exercise of shareholder rights, including participation and voting in general meetings and timely transmission of information from companies to shareholders.
  • Remuneration: grants shareholders a binding vote on directors’ pay policies, linking remuneration to longterm company performances.
  • Investor transparency and engagement: mandates institutional investors and asset managers to disclose their engagement policies and how they exercise shareholder rights.
  • Transparency for proxy advisors: introduces transparency requirements for proxy advisors, including disclosure of methodologies and conflicts of interest, to enhance the reliability of voting recommendations.

 

Ongoing review

As part of its broader agenda under the Savings and Investments Union (SIU), the European Commission is currently evaluating and potentially updating the SRD II and launched a public consultation in February 2026 to gather evidence on the need for a revision of the directive.

The review focuses in particular on addressing persistent shortcomings in the functioning of the shareholder rights framework, including inefficiencies in information transmission, and other barriers to the effective exercise of voting rights in cross‑border contexts.

 

The Shareholder Rights Directive II aims to strengthen shareholder rights and encourage long‑term investor engagement in EU‑listed companies. It is about promoting corporate transparency and effective stewardship by empowering shareholders.