One Share, One Vote?

It sounds more than reasonable to apply this formula to the realm of corporate governance. After all, what is seen as the best (or maybe least bad) system of government in the political field, should also be the most appropriate form of shareholder representation.
Never mind that even in politics this principle is only a rough guide to the reality. Various intended and unintended checks and balances exist and lead to a situation where the principle is undermined.
In our opinion, calls by the Association of British Insurers or the EC for the introduction of unified share voting rules should be scrutinised carefully. The founding fathers of the US constitution were deeply suspicious of unfettered democracy and maybe shareholders would be better served if the voting structure in public companies is designed as carefully as the constitution of the United States.
We are certainly not in favour of giving groups of shareholders (often founding families or other controlling owners) different voting rights. But more research is necessary and may well lead to the conclusion that the limitation of voting rights is well-suited to force all stakeholders to focus on the long-term well-being of the enterprise.
Some recent corporate controversies - Deutsche Boerse, Newcorp or Rentokil, to name just the most prominent ones - would have developed differently if there would have been different voting arrangements.


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