DSW’s Fifth International Investors Conference 2006
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Transcript of DSW’s Fifth International Investors Conference 2006
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DSW’s Fifth International Investors Conference 2006How can We Increase Shareholders’
Responsibility to Vote?
Christian Schwarz
SGL Carbon AG
December 6, 2006
Wiesbaden
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Overview of Contents:Overview of Contents:
Situation
Threat
Solution
Arguments
Opportunities
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Possibilities:Legal Data Warehouse Possibilities:Legal Data Warehouse
Presence of shareholders‘ equity declines at annual general meetings of German corporations, particularly at those corporations with a strong broadly based share ownership structure (only about 25% – 45% presence of shareholders’ equity)
Risk that a small group of short-term oriented shareholders will represent the majority of votes in the shareholder meeting using this majority to - in the end - negatively influence the long-term capital appreciation of the remaining shareholders and the company.
Situation:Situation:
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Threat: Threat:
Minority decides in a way which is not oriented to sustain corporate success and value and not supported by the majority of all shareholders.
Divestiture/Break-up of companies or assets resulting in a loss of jobs.
Consequence: overall economic disadvantages/burdens
Weakening of Germany as a financial marketplace and as a place to do business
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Possibilities:Legal Data Warehouse Possibilities:Legal Data Warehouse
Amendments of corporate laws in order to involve all shareholders eligible to vote (100% of registered capital)
• 100% of the registered capital is present for voting on the day of the AGM
• If shareholders agree with the proposal of the management, no action necessary. Their votes will be automatically evaluated as approval (expansion of the already existing „subtraction principle“)
• If shareholders are against the proposal of the management, they have the following options:
(1.) to attend the AGM in person or(2.) to appoint a proxy of their own choice
in order to vote against the proposals of the management, or to abstain.
Solution: Solution:
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Possibilities:Legal Data Warehouse Possibilities:Legal Data Warehouse
1. Legal implementation possible Voting during the AGM is a manifestation of will
Rejection regarding this method of resolution:
if law demanded a clear reaction to the outside
if not reacting or silence were not sufficient as a manifestation of will under the legal definition
But the opposite is the case:
• The law has even regulated these kinds of cases under the statutes for personal legal transactions.
No misgivings under constitutional law
2. Respect of Decision-making authority of all shareholders
3. Reduction of bureaucracy and administrative processes
Arguments:Arguments:
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Opportunities: Opportunities:
1. Involvement of all shareholders (100% of registered capital) in voting
2. Reduction of administrative processes (reduction of bureaucracy)
3. Avoidance of destructive influence of short-term oriented shareholders on German corporations
4. Protection of jobs and thus strengthening of Germany as a place to do business and as a financial market place