1. Enabling the Business of Corporate Governance Improving the rights of shareholders of companies across the Member States Jean-Nicolas Caprasse Managing Director ISS Europe June 28, 2005 Luxembourg Second European Corporate Governance Conference

2. www.issproxy.com © 2005 Institutional Shareholder Services Inc. Improving shareholders rights – June 28, 2005 2 Agenda A basic shareholder right : the right to vote Exercising shareholders rights

3. www.issproxy.com © 2005 Institutional Shareholder Services Inc. Improving shareholders rights – June 28, 2005 3 35% of European listed companies do not apply the one share – one vote principle Companies applying the one share – one vote principle in Europe Source : Application of the one share – one vote principle in Europe, March 2005, Deminor Rating commissioned by the Association of British Insurers. Scope : Companies in the FTSE Eurofirst 300 as of July 1, 2004.

4. www.issproxy.com © 2005 Institutional Shareholder Services Inc. Improving shareholders rights – June 28, 2005 4 European companies feature a striking variety of exceptions to the one share – one vote principle Frequency of exceptions to the one share – one vote principle in Europe Source : Application of the one share – one vote principle in Europe, March 2005, Deminor Rating commissioned by the Association of British Insurers. Scope : Companies in the FTSE Eurofirst 300 as of July 1, 2004. Multiple voting rights Voting right ceilings Golden shares Non-voting shares without preference Ownership ceilings Depository receipts Priority shares

5. www.issproxy.com © 2005 Institutional Shareholder Services Inc. Improving shareholders rights – June 28, 2005 5 Agenda A basic shareholder right : the right to vote Exercising shareholders rights

6. www.issproxy.com © 2005 Institutional Shareholder Services Inc. Improving shareholders rights – June 28, 2005 6 The market needs a reliable end-to-end audit trail for the casting of votes The governance landscape of voting Investment Mgrs Investment Mgrs Pension Plans Pension Plans Mutual Funds Mutual Funds Custodian Banks Custodian Banks Sub- Custodians Sub- Custodians Beneficial Owners Beneficial Owners Corporate Issuers Corporate Issuers Registrars/ Tabulators Registrars/ Tabulators Middle Offices

7. www.issproxy.com © 2005 Institutional Shareholder Services Inc. Improving shareholders rights – June 28, 2005 7 The second EU consultation contributes to fostering an appropriate regime for shareholders rights Towards the effective use of shareholders rights Appropriate regime for shareholders Rights and duties of shareholders Pre and post meeting information Voting formalities Voting by correspondence and proxy voting Full audit trail What shareholders rights Fiduciary duty to vote ? ? ?