In 11.. Associate professor at Gothenburg University.the 22.. Professor at Gothenburg University. We thank Professor Paul Davies, University of Oxford, for his helpful comments and suggestions.UK Listing Review it is suggested that the LSE should allow companies with dual class share (DCS) structures 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 Review to allow for DCS-listings under certain conditions. Second, we discuss the arguments that are made against DCS-listing. 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 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.
1. Introduction
In the UK Listing Review, backed by the UK Treasury and carried out by former European Commissioner Lord Jonathan Hill (the Hill Review), presented on March 3, 2021, it is suggested that the London Stock Exchange (LSE) should allow companies with dual class share structures with differentiated voting rights (DCS-structures) to list on the Premium listing segment of the LSE. The suggestion has garnered a lot of attention in the DCS-debate, given how the LSE has, for a lon ...