London Allowing Dual Class Premium Listings: A Swedish Commentary

European Corporate Governance Institute - Law Working Paper 580/2021

Nordic Journal of Company Law (NTS), Forthcoming

34 Pages Posted: 14 Apr 2021

See all articles by Erik Lidman

Erik Lidman

Gothenburg School of Business, Economics and Law; Stockholm Corporate Governance Forum

Rolf Skog

University of Gothenburg - Department of Law

Date Written: April 14, 2021

Abstract

In the UK Listing Review it is suggested that the London Stock Exchange should allow companies with dual class share (DCS) structures with differentiated voting rights to list on the Premium segment. In this paper, we discuss this proposal. First, we present an overview of the DCS-debate together with the proposition in the Hill Review to allow for DCS-listings under certain conditions. Second, we discuss the arguments that are made against DCS-listings. For the sake of comparison and reference, we then give an overview of the Swedish DCS-regulation and the political economy. From there, we discuss the conditions for DCS-listing recommended in the Hill Review. Our conclusion is that several of the DCS-listing conditions suggested might not only hinder DCS-structures from being useful for companies that wish to utilize such structures but would in several cases disable the corporate governance mechanisms that would otherwise counteract several of the problems that DCS-structures can give rise to, most prominently the market for corporate control.

Keywords: Dual Class Shares, Multiple Voting Shares, UK Listing Review, Swedish Corporate Governance

JEL Classification: G30, G32, G34, G38, K20, K22

Suggested Citation

Lidman, Erik and Skog, Rolf R., London Allowing Dual Class Premium Listings: A Swedish Commentary (April 14, 2021). European Corporate Governance Institute - Law Working Paper 580/2021, Nordic Journal of Company Law (NTS), Forthcoming, Available at SSRN: https://ssrn.com/abstract=3826174 or http://dx.doi.org/10.2139/ssrn.3826174

Erik Lidman

Gothenburg School of Business, Economics and Law ( email )

Gothenburg
Sweden

Stockholm Corporate Governance Forum ( email )

Stockholm
Sweden

HOME PAGE: http://https://kabstiftelse.se/en/about-the-corporate-governance-forum/

Rolf R. Skog (Contact Author)

University of Gothenburg - Department of Law ( email )

Viktoriagatan 30
Box 650
Göteborg, 40530
Sweden
+46 31 7866990 (Phone)

HOME PAGE: www.law.gu.se

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