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21 March 2020

Romania: Secret voting in general shareholders' meetings

The corporate functioning rules for joint stock companies have been repeatedly altered by Romanian legislation, especially in relation to the governing structures of companies, such as shareholders' assemblies and management bodies.

General shareholders' meetings (GSMs) have been described by doctrine and jurisprudence as the "supreme governing body of a company" (Companies' Law 31/1990). This law sets out rules which determine the attributions and functioning mechanisms of GSMs, particularly for joint stock companies.

Even if all the elements of a GSM are covered by jurisprudence, there are inevitably some elements which are not clearly addressed at a legislative level. For some of these elements, company practice frequently finds solutions which may be accepted by jurisprudence and may even subsequently be converted into law.

Nonetheless, some situations create problems in practice or generate inconsistencies within jurisprudence. One such example is the use of secret voting in GSMs.

Legal coverage of voting procedures

The Companies' Law provides that shareholders must use an open vote when voting in a GSM. An open vote can take the form of:

  • hand raising;
  • standing up;
  • nominal calling of shareholders, by way of using a hard copy voting bulletin; or
  • using hardware or software applications which can correctly centralise the votes and their outcome.

However, Romanian lawmakers have also set out certain situations in which a vote must be made in secret. According to the Companies' Law, a secret vote is mandatory:

  • for the appointment or revocation of members of the board of directors and members of the supervisory board; 
  • for the appointment, revocation or dismissal of censors or financial auditors; and 
  • for making decisions regarding the liability of members of administrative bodies, management and controllers of the company.

However, the Companies' Law provides no definition or example of a 'secret vote', nor does it give any details regarding the extent of the vote's secrecy in terms of duration or opposability. For this reason, the methods for implementing and completing a secret vote vary greatly in Romania.

Duration of a secret vote

When it comes to duration, it is only natural for the secrecy of a vote to be temporary. The vote must be kept secret only during the GSM, from the meeting's commencement until all present or represented shareholders have expressed their vote and the result of the vote has been announced. In this way, the present or represented shareholders and the persons chairing the GSM do not know how the other shareholders are voting, thus preventing any potential to influence a vote unfairly.

It was for this reason that Romanian lawmakers prescribed situations in which a secret vote must be used. For example, in the case of appointing members of the board of directors, because this is an elective process in which each shareholder must express his or her vote in a free and uninfluenced manner, the way that the shareholders vote must not be known by the persons proposed to be appointed as members of the board of directors.

In older Romanian doctrine, the purpose of using a secret vote is to remove the personal influence of the members of the board of directors over the shareholders; influence which may distort the result of the vote.

Therefore, it is fair to determine that a vote's secrecy is temporary and that secrecy ends when the result of the vote is announced. If the secrecy of a vote were to be kept after the voting process has ended, the other rights of shareholders provided for in the Companies' Law could not be upheld because they would publicly expose the way that a shareholder voted. For example, this would contravene the right to request the insertion in the minutes of a GSM a record of voting against a point on the agenda; a procedure which allows the respective shareholder to challenge a GSM resolution in court.

Opposability to a secret vote

Similarly, further guidance would be useful with regards to the opposability of a vote's secret nature and towards whom the secrecy has to be kept as the Companies' Law provides no details on this matter. It would also be useful for further guidance concerning who is responsible for ensuring the vote's secrecy.

A company must take all reasonable measures to ensure that during a GSM voting process individual votes are not disclosed between shareholders, board members or candidates. The creation of secret voting rules should be not only the responsibility of the company and its representatives participating in the GSM, but also the responsibility of the shareholders present at the GSM, who should not disclose the way that they vote to the other shareholders or members of the board.

However, shareholders' votes may be disclosed to certain persons (eg, persons present at the GSM or technical secretaries who are responsible for the logistical organisation of the meeting). According to the Companies' Law, every GSM must have a secretary and there can also be technical secretaries who perform duties relating to the organisation of the meeting (eg, collecting proxies and voting by correspondence ballots, distributing voting bulletins, collecting and centralising ballots and the announcement of voting results).

The practice of joint-stock companies' in this respect is guided by the provisions of the Capital Markets Law (Law 24/2017) which applies to companies listed on a regulated market. The Capital Markets Law states that if there are points on the GSM agenda that require a secret vote, then the vote should be expressed through a means which allows for the disclosure of the vote only:

  • to the members of the technical secretariat responsible for counting the secret votes cast; and 
  • after all present shareholders have finalised and handed over their votes.

In theory, these rules are also relevant for unlisted companies, especially since the Capital Markets Law provides no derogatory provisions from those present in the Companies' Law which refer to the secret vote, but only provides additions or clarifications over ambiguous matters under the Companies' Law.

Although these provisions are enshrined in a normative act which applies only to listed companies, the applicability of the secret vote in case of unlisted companies in situations regulated by the Companies' Law cannot be strictly interpreted, since a restrictive approach may lead to conflicts with other mandatory shareholder rights provided by the Companies' Law. For example, the Companies' Law allows shareholders to vote in a GSM by representative or by correspondence. If the secrecy of a vote had to be kept from technical secretaries in charge of collecting and centralising votes, then shareholders could not vote by representative or by correspondence because this would lead to the disclosure of the votes. This approach is contrary to the Companies' Law, which contains no such restrictions for shareholders.


It would be useful for practice and the uniformity of jurisprudence for the Companies' Law to apply some of the provisions from the Capital Markets Law regarding opposability and the application of rules for secret votes.

As long as the Companies' Law provides no definition of a 'secret vote' or a clear procedure for its application in terms of duration and opposition, disputes regarding the annulment of GSM resolutions for allegedly breaching the secrecy of the vote will continue to be resolved by the courts solely on their interpretation, without having clear legal provisions to guide them. This situation will result in inconsistencies which are detrimental for companies as the annulment of a GSM resolution can have serious consequences.

This article was first published on 


Further reading:

Supervisory Board: Disclosure of conflicts of interest and confidential information