By Andy Myers
When the European Union's Shareholder Rights Directive II (SRD II) came into full effect in 2019, it represented the most ambitious attempt by any jurisdiction to bring transparency and accountability to the proxy voting chain. The directive required intermediaries to transmit meeting information electronically, gave issuers the legal right to identify their shareholders, and mandated that vote confirmations be made available on request.
Nearly seven years on, EU stewardship culture has more than matched that ambition. The 15 largest European asset managers have consistently supported upwards of 95 per cent of significant environmental and social resolutions over the past five proxy years, according to Morningstar Sustainalytics research, a level of engagement not seen elsewhere. Despite the efforts of digital investor communication platforms such as Proxymity, who have succeeded in certain markets, the operational infrastructure supporting vote transmission through the intermediary chain has not kept pace, reflecting the slower adoption of online solutions. Fundamentally the operational infrastructure supporting that engagement has not advanced at the same pace.
SRD II has helped raise expectations and establish important legal rights, but it has not, on its own, delivered end-to-end digital voting from issuer to investor across European markets. Progress has been uneven. Some markets have made meaningful advances, particularly where digital investor communication platforms have been adopted, but much of this progress has been driven by market implementation and technology investment rather than the directive itself delivering a fully digital operating model.
With the European Commission now consulting on whether the directive remains fit for purpose, and a formal review expected by the end of 2026, the gap between regulatory intent and operational reality presents an opportunity to better align policy with practice.
Regulation as catalyst
SRD II was a response to a structural problem that had persisted for decades. In several member states, the process of identifying who owned shares in a listed company had been entirely voluntary, and issuers had no legal mechanism to find out. Meeting announcements were routinely delayed as they passed through chains of registrars, custodians, and sub-custodians.
Votes were lost or distorted in transit, and investors in many European markets had no reliable way of confirming whether their vote had been recorded at all. The directive sought to address this head-on, requiring that information be transmitted between intermediaries without delay and establishing shareholder identification rights as a legal entitlement rather than a discretionary courtesy.
The impact has been significant, but incomplete. SRD II has accelerated the use of electronic messaging and created a stronger foundation for cross-border shareholder communication. It has reduced some of the friction that once made voting particularly unreliable. But minimum regulatory standards have not translated into consistent digital adoption across every market, nor have they created a fully connected chain from issuer to investor.
A stewardship culture that demands better infrastructure
Europe's regulatory progress is reinforced by an investor culture that takes voting seriously, and the contrast with other major markets is stark. Average support for significant environmental and social shareholder resolutions among the 20 largest US asset managers fell to around 31 per cent in 2024. By contrast, their European counterparts maintained average support at approximately 96 per cent over the same five-year period, according to Morningstar's stewardship research.
This consistency reflects both the regulatory environment shaped by SRD II and a broader institutional commitment to active ownership as a component of fiduciary duty, which runs deeper in European markets than in most others.
This level of engagement, however, places demand on infrastructure that the current system does not always meet. When asset managers are voting on nearly every resolution across multiple markets and jurisdictions, the operational systems carrying those instructions need to handle volume and complexity without introducing errors, delays, or gaps in confirmation. The stewardship standards that European investors have set for themselves cannot be sustained indefinitely by infrastructure designed for a lower, less complex level of participation.
Where the gaps persist
For all its strengths, Europe’s proxy voting ecosystem is not yet fully digital, and the inconsistencies that remain have practical consequences. SRD II set minimum standards but left member states with considerable room to interpret and implement them differently, producing a patchwork of practices across the region.
No market has yet delivered true end-to-end digital voting from issuer to investor through the regulatory framework alone. Where this level of connectivity exists, it is the result of dedicated technology and market adoption, not simply the automatic effect of SRD II. In some markets, companies using platforms such as Proxymity can now benefit from digital voting and real-time vote confirmation. Elsewhere, digital and legacy processes still run side by side, with data lost or delayed at the joins.
Vote confirmation illustrates this unevenness well. SRD II gives shareholders the right to receive confirmation that their votes have been recorded and counted, but the reliability, timeliness, and practical availability of those confirmations still vary by market and intermediary. Corporate disclosure presents a similar picture, with the speed and completeness of shareholder identification responses differing markedly between member states.
These inconsistencies are well recognised. The European Commission's decision specifically invites views on how shareholder rights could be modernised to reflect changes in market practices and technology. This suggests that a more prescriptive approach to digital adoption may follow.
Strong shareholder rights and effective corporate governance are widely recognised as essential components of healthy capital markets. The OECD Principles of Corporate Governance highlight transparency, shareholder participation and effective communication between issuers and investors as key elements supporting long-term market confidence. As European capital markets become increasingly interconnected, strengthening the operational infrastructure that supports these principles is becoming just as important as the regulatory framework itself.
Connecting the chain
There are clear signs that the industry is not waiting for regulatory instruction.Euroclear's recent strategic investment in Proxymity, announced in February 2026, reflects how post-trade infrastructure providers are looking to embed digital governance directly into their operations. One example is Proxymity, whose Vote Connect platform enables real-time communication between issuers and investors across more than 105 markets. Alongside broader industry efforts to modernise shareholder communications, solutions such as these illustrate how technology is helping bridge the operational gaps that remain within Europe's proxy voting ecosystem.
Our Shareholder Disclosure solution, meanwhile, helps intermediaries meet the identification and transparency obligations that SRD II introduced. The fact that major institutions across Europe are embedding these capabilities into their core operations, rather than treating them as add-ons, signals a broader shift in how the industry values the operational layer of shareholder voting
What the SRD review could unlock
The European Commission’s review arrives at a moment when Europe has many of the conditions needed to establish a genuinely digital proxy voting ecosystem: strong regulation, sophisticated market participants, and an investor culture that places high value on stewardship. What it does not yet have is consistent end-to-end digital adoption across markets.
A more prescriptive approach to digital adoption, greater harmonisation of vote confirmation standards across member states, and clearer expectations around the timeliness of corporate disclosure would go a long way toward closing the gap between what SRD II envisaged and what European markets currently deliver.
If the review leads to those outcomes, Europe will be better placed to set a global benchmark for digital shareholder governance. But that benchmark will depend on recognising the difference between regulatory intent and operational delivery, and on ensuring that the next phase of SRD builds on the technology and market infrastructure already proving what end-to-end digital voting can look like in practice.
