Deviations from Ownership-Control Proportionality - Economic Protectionism Revisited

COMPANY LAW AND ECONOMIC PROTECTIONISM - NEW CHALLENGES TO EUROPEAN INTEGRATION, U. Bernitz and W.G. Ringe, eds., OUP, 2010

Oxford Legal Studies Research Paper No. 23/2011

32 Pages Posted: 22 Mar 2011 Last revised: 6 Jun 2011

See all articles by Wolf-Georg Ringe

Wolf-Georg Ringe

University of Hamburg - Institute of Law & Economics; University of Oxford - Faculty of Law; Stanford University; European Corporate Governance Institute (ECGI)

Date Written: 2010

Abstract

In the wake of the economic crisis of 2008/09 the debate about the desirability of control-enhancing mechanisms that deviate from the traditional one-share-one-vote standard has been reinvigorated. This debate can be seen in the discourse of policy makers and academics that advocate the introduction of multiple voting rights in an attempt to curb the short-termism that is perceived by many to have provided the prevalent business incentive prior to the financial crisis. Alongside such discourse there buds a renaissance in the use of golden shares, in the hope, inter alia, of protecting European industries against Sovereign Wealth Funds from the Middle and Far East. Most of these proposals appear to be ill-advised. In the continental European context, they would reinforce the existing blockholder-dominated share structures to the detriment of minority shareholders. But even in the UK, where the possible introduction of deviations from OSOV has been advanced, these suggestions have to be greeted with reservations. The current discussion seems to leave well-established legal and economic ground actively to support protectionist market forces.

Keywords: one share one vote, short-termism, sovereign wealth funds, corporate governance, multiple voting rights, control-enhancing mechanisms, golden shares

JEL Classification: F15, G32, G34, K22

Suggested Citation

Ringe, Wolf-Georg, Deviations from Ownership-Control Proportionality - Economic Protectionism Revisited (2010). COMPANY LAW AND ECONOMIC PROTECTIONISM - NEW CHALLENGES TO EUROPEAN INTEGRATION, U. Bernitz and W.G. Ringe, eds., OUP, 2010, Oxford Legal Studies Research Paper No. 23/2011, Available at SSRN: https://ssrn.com/abstract=1789089

Wolf-Georg Ringe (Contact Author)

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