Multiple Voting Rights in Shares - Old Misconceptions and New Challenges

Abstract

Shares with multiple voting rights have been known in Nordic company law for generations and are considered harmless and frequently useful. Nordic company law leaves considerable flexibility to companies and their investors on how to design the capital structure of the company, including the use of MVR shares, while ensuring a high level of minority protection. However, there are many misconceptions surrounding MVR shares in other jurisdictions, probably due to a lack of familiarity. This used to be a problem only for foreigners but now the Nordic jurisdictions are at risk of having these misconceptions forced upon them, partly by EU harmonisation, partly by foreign proxy advisors. It is necessary for those, whose responsibility it is to protect and safeguard the present well-functioning Nordic system to prevent this, i.e. both public authorities and the national CG committees, and a few solutions are presented to that end.

Keywords: multiple voting rights, one-share, one vote, corporate governance, Nordic CG model, EU harmonisation, proxy advisors

JEL Classification: K22