FRANCE Law and Practice Contributed by: Sophie Vermeille, Vermeille & Co
2.10 Shareholders’ Rights Relating to the Business of a Meeting In France, it is important to distinguish between (i) agenda items that may be placed on the order of busi- ness of a shareholders’ meeting and (ii) resolutions that are formally submitted to a vote. In SAs, a recent court decision has taken a strict view of the statutory separation of powers between the shareholders’ meeting and the board of directors. The commercial court of Nanterre has held that even a purely advisory resolution – in that case, recom- mending the separation of the CEO and chair func- tions – could not validly be put to a shareholder vote, as it concerned the conduct of the company’s busi- ness, which falls within the exclusive competence of the board. By extension, any proposed resolution – whether binding or advisory – that interferes with the board’s managerial prerogatives is inadmissible. Shareholders may nevertheless request the inclusion of agenda items relating to matters falling within the board’s jurisdiction, but such items will only give rise to a discussion during the meeting, not to a vote. This leaves shareholders with significantly narrower tools than in jurisdictions where advisory “say on strategy” votes are more common. In SAS, the regime is more flexible. The articles of association and, where applicable, shareholders’ agreements may grant shareholders broader rights to require that specific matters be submitted to their vote (whether binding or consultative), including issues that, in a listed SA, would normally fall within the board’s exclusive authority. 2.11 Challenging a Resolution In France, a shareholder may challenge a resolution passed at a general meeting, but only on narrow grounds. The shareholder must show both standing (a legitimate interest to act) and a procedural defect, such as breach of the French Commercial Code or the company’s articles of association (eg, defective notice, quorum or voting irregularities). Unlike in common law systems where courts may review the substance of shareholder decisions under fiduciary duty or “unfair prejudice” doctrines, French
courts do not review the merits of resolutions. They will not annul a resolution simply because it is con- sidered unfair to minority shareholders. Substantive grievances must instead be pursued through separate claims, such as an abus de majorité (abuse of majority) or liability actions against directors. Recent developments have reinforced this restric- tive approach. An ordinance adopted in March 2025 (effective 1 October 2025) significantly narrows the list of defects that may lead to the annulment of share- holder resolutions, in order to enhance legal certainty and reduce tactical litigation. The trend is therefore clearly toward limiting shareholder challenges, making annulment an exceptional remedy. 2.12 Institutional Shareholder Groups In listed companies, institutional investors in France have traditionally preferred to engage discreetly with boards and management rather than challenge them publicly. Open confrontation with large French cor- porates remains relatively uncommon compared to in the US or UK. That said, practices are evolving. A notable example is the Atos case in 2023, where a French institutional investor sought the resignation of the board chair – something that would have been unthinkable a dec- ade ago. Alongside this, foreign activist funds are increasingly visible on the French market and often drive more confrontational campaigns on governance or strategy. French institutional investors are particularly active on ESG issues. They frequently co-ordinate voting strate- gies, submit written questions ahead of shareholder meetings, or engage in structured dialogues with issu- ers to influence corporate behaviour. Proxy advisers (such as ISS and Glass Lewis) also play a growing role, particularly for international investors who rely heavily on their recommendations when voting in French general meetings. Overall, while shareholder coalitions remain less for- malised than in the US or UK, the combination of ris- ing ESG expectations, proxy adviser influence and occasional activist campaigns is gradually reshaping engagement practices in France.
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