The business environment is constantly evolving, with regulatory changes that can significantly impact how companies operate. For organizations using a Foundation for the Administration of Shares (STAK) to manage their share structure, these changes can present both challenges and opportunities. In this blog, we discuss the recent and anticipated regulatory developments and how they may affect the operation and benefits of STAKs.

What is a STAK?

A STAK, or Foundation for the Administration of Shares, is a legal entity that holds a company's shares and issues certificates of those shares to certificate holders. The STAK manages the underlying shares and exercises voting rights, while the economic rights (such as dividends) lie with the certificate holders. This provides a flexible way to structure and protect control over the company.

Impact of Regulatory Changes

• Increased Transparency: New regulations place more emphasis on transparency in corporate governance. Companies must clearly communicate their ownership structures and the role of STAKs within these structures. This may mean more detailed reporting requirements for companies using a STAK.
• Protection of Minority Shareholders: Regulators aim to better protect minority shareholders. This can lead to stricter rules on how STAKs exercise voting rights and manage economic rights to ensure the interests of all shareholders are fairly represented.
• Adapting to European Directives: European directives such as the Shareholder Rights Directive (SRD II) influence national regulations. These directives promote shareholder engagement and demand more transparency from companies. Companies with a STAK must adapt to these directives to remain compliant.
• Sustainability and Responsible Business: There is a growing focus on sustainability and corporate social responsibility in regulations. Companies may be encouraged to adjust their corporate structures, including STAKs, to contribute to long-term sustainability goals and social responsibilities.

How Can Companies Adapt?

• Legal and Compliance Advice: It is essential to seek legal advice to stay informed about the latest regulatory requirements and how they affect STAKs. This helps identify necessary adjustments in the structure and operation of the STAK.
• Transparent Communication: Develop and implement strategies for transparent communication about the role and operation of the STAK. This includes regular reports and updates to shareholders on how the STAK contributes to corporate objectives.
• Adjusting Governance: Structures Review and optimize governance structures to ensure compliance with new regulations. This may include adjusting voting rules and improving the protection of minority shareholders.
• Integrating Sustainability Goals: Adjust the corporate structure to integrate sustainability and social goals. This may involve deploying the STAK to protect long-term visions that go beyond mere profit maximization.

The Role of Share Council

At Share Council, we are dedicated to helping companies adjust their STAK structures to meet changing regulatory requirements. Our platform provides advanced tools and technologies to manage and optimize participation programs and governance structures. We ensure that companies comply with the latest regulations while achieving their strategic goals.

Conclusion

Regulatory changes can significantly impact the operation and benefits of STAKs. By being proactive and adapting to these changes, companies can continue to leverage the advantages of their STAK while complying with new requirements. At Share Council, we support companies in this transformation with innovative solutions and expertise.

Discover how Share Council can help your company optimize STAKs and other governance solutions by visiting our website and contacting us. Together, we can work towards a future where your governance structures remain robust and compliant, regardless of regulatory changes.