Every shareholder of a company benefits from rights that allow for their effective involvement in the company’s activities, thereby protecting their investment.

Specifically, exercising the right to information enables shareholders to make informed decisions regarding the company.

According to Article 117² paragraph (3): “Each shareholder may address written questions to the Board of Directors or the Directorate regarding the company’s activity before the date of the general meeting, and the response shall be given during the meeting.”

However, the wording of the law also allows for questions to be raised concerning matters that are not included on the agenda of the general meeting.

There may be a concrete need to know about situations and documents beyond the annual financial statements, the annual report of the Board of Directors, the Directorate’s report, or that of the Supervisory Board. In fact, in most cases, these documents alone do not fully meet the informational needs of a shareholder to be able to vote knowledgeably on the financial situation, the income and expenditure budget, the discharge of directors from liability, the activity plan for the next financial year, etc.

The right to information is a sine qua non condition for exercising control over the company—a right equally held by each shareholder, regardless of the number of shares they own.

The fulfillment of the right to information aims to uphold a key principle: investor protection. It is the only right that gives the shareholder a real possibility to assess the accuracy and efficiency of the company’s management.

Violation of this right negates any possibility of effective participation in company life and renders the shares entirely irrelevant from a decision-making standpoint, undermining any notion of affectio societatis.

Jurisprudence has established that merely having access to a simplified balance sheet (condensed financial statements) does not enable an understanding of how the liabilities/assets in that plan were derived, nor of the financial situation presented.

It is also important to mention that the right to information, by its very nature, represents a principle applicable to any form of company, without which the execution of the corporate contract cannot be conceived.

Every shareholder—especially minority shareholders—enjoys two essential rights: the right to information and the right to dividends.

It is natural for the shareholder who has subscribed capital and holds shares to have the right to participate in the benefits, accompanied by the opportunity to know the company’s economic evolution and to identify the added value generated for their investment through the implementation of previously proposed and adopted measures.

Moreover, the right to information is indispensable to the right to vote, since without complete and accurate information regarding the items on the agenda, the shareholder cannot exercise their voting right. Essentially, they would be asked to vote “blindly,” which strips the voting right of its substance.

Ultimately, a shareholder’s ability to analyze the documents underpinning the company’s operations and to cast a well-founded, informed vote represents a recognition of their ownership right over their shares.

According to Article 114¹ paragraph (1) of Law 31/1990, “The directors are responsible for fulfilling all obligations, in accordance with the provisions of Article 72 [for example, the strict performance of duties imposed by law or the articles of incorporation].” At the same time, Article 144¹ paragraph (1) of Law 31/1990 states that the members of the Board of Directors must perform their mandate with the prudence and diligence of a good manager, and according to Article 114¹ paragraph (4), they must perform their mandate loyally, in the interest of the company.

The liability of directors can be triggered whenever there is a breach of duty by the company’s leadership. Such a breach may involve the violation of a legal or contractual provision, or a simple act that causes harm—such as the failure to respect the right to information.

Author: Atty. Lavinia Rusu