UK: the IoD on takeover rule reform and the stewardship code

The Institute of Directors is calling for reform of the UK takeover rules: see here. The Institute argues, amongst other things, that a greater role should be given to the shareholders of the bidding company and advocates a rule that would require hostile takeovers to be approved by a two-thirds majority of shareholders in the target and bidding companies.

The Institute has also published its submission to the FRC's consultation on the stewardship code for institutional investors - see here - and has called for much greater engagement between institutional investors and boards where the investor holds more than one per cent of the company's market capitalisation. The Institute also argues that the stewardship code should deal explicitly with share lending and that it should recognise that it is bad practice to borrow shares for the purpose of shareholder voting.