Dueling shares: comparative EU-US corporate governance practices
The purpose of this study was to discover if and how the EU and US have approached dual-class shares and the one share-one vote principle in different manners. The EU and US have become thought leaders in security regulation and installing methods of best practice into their laws and corporate governance guidance. However, the EU and US have a history of divergent corporate governance systems and have legislated company law independently of each other. Looking at the oft-debated best practice of one share-one vote within this context would yield an interesting appraisal of where transatlantic views on corporate governance, whether divergences still exist, and why these divergences may persist. The research employed a qualitative methodology. It utilized both a review of securities laws and guidance that related specifically to shareholder voting rights as well as a formal case study. The case study aimed to consider how companies within the EU and US across different industries have used dual-class shares and approached the one share-one vote principle. Twenty-four firms were reviewed and analyzed against eight corporate governance provisions to add robustness to firm use of corporate governance best practices. Results show that dual-class shares do not necessitate disproportionate voting rights, single class stock can yield disproportionate voting rights among shareholders, and also, policymakers, scholars, and institutional investors have not reached consensus that one share-one vote is a best practice or that provisions that safeguard minority shareholder voting rights are in a firm’s best interest.
Corporate Governance, Dual-class shares, shareholder rights, one share-one vote, European Union, United States
University of Illinois - Urbana-Champaign
Networked Digital Library of Theses and Dissertations
University of Illinois at Urbana-Champaign