13 - Shareholder Democracy in Denmark: Contrasting Law on the Books and Law in Practice

Summary

Under Danish law, the general meeting is omnipotent, meaning that it can decide on most issues, including issues that deal with day-to-day management of the company. Thus, in theory, shareholders are in a position to ensure that the general meeting decides most issues of concern to them, and the rules on calling a general meeting or proposing topics for the meeting agenda are also rather generous to shareholders. In practice, however, shareholders rarely call a meeting. Although they occasionally propose issues for the meeting agenda, those proposals are almost always voted down by a very high majority. Therefore, the potential for shareholder democracy and activism is not being exploited by shareholders in Denmark.It seems that in normal circumstances, a board will propose agenda items only when the law requires it to do so. We did find, however, that shareholders often ask questions and engage in debate at general meetings. We therefore conclude that shareholder democracy and activism are present in Denmark, although most likely it often takes place as interaction between the board and major shareholders before general meetings are held.