Rethinking 'One Share, One Vote'
Harvard Business Review, January 2013
Financial News, February 2013
Posted: 4 Feb 2013 Last revised: 14 Sep 2020
Date Written: 2013
'One-share, one-vote,' a bedrock principle of Anglo-Saxon corporate governance, is back in the spotlight. Except this time, the aim is to diminish its application rather than to extend its global footprint.
Hoping to stem the tide of short-termism in the financial markets, prominent commentators have advocated bolstering the voting rights of long-term shareholders or, conversely, withholding them from short-term investors. Significantly, it was recently reported that the European Commission was preparing a proposal to give 'loyal' shareholders extra voting influence.
This commentary discusses the case for departing from the one-share, one-vote standard and the issues to consider to ensure that the intended benefits are realized without accompanying adverse or other unintended outcomes.
Keywords: corporate governance, shareholder rights, short-termism
JEL Classification: G10, G32, G34
Suggested Citation: Suggested Citation