The recent legislative package known as the EU Listing Act has sparked a debate on the use of multiple voting rights (MVR) shares in the European Union, particularly for companies listed on SME Growth Markets. This paper examines the implications of the directive from two perspectives: the potential benefits and drawbacks of MVR shares, and the question of whether their use should be harmonized among Member States or left to national company law.
The “one share, one vote” principle (OSOV) has long been a central tenet of corporate law, ensuring that voting rights and economic rights are distributed proportionally to invested capital. However, the Finnish Companies Act allows for deviations from this principle, reflecting a cultural preference for contractual freedom among shareholders.
The paper argues that the lack of empirical evidence for the harm or benefit of MVR shares suggests that the issue is largely cultural, and thus, EU-wide harmonization may not be justified. It concludes that while harmonization of capital markets is beneficial for cross-border investments, altering corporate governance structures should be approached with caution due to the cultural differences and potential unintended consequences within Member States’ corporate governance frameworks.
The “one share, one vote” principle (OSOV) has long been a central tenet of corporate law, ensuring that voting rights and economic rights are distributed proportionally to invested capital. However, the Finnish Companies Act allows for deviations from this principle, reflecting a cultural preference for contractual freedom among shareholders.
The paper argues that the lack of empirical evidence for the harm or benefit of MVR shares suggests that the issue is largely cultural, and thus, EU-wide harmonization may not be justified. It concludes that while harmonization of capital markets is beneficial for cross-border investments, altering corporate governance structures should be approached with caution due to the cultural differences and potential unintended consequences within Member States’ corporate governance frameworks.
During the past decades there have been several attempts to enforce a mandatory “one share, one vote” principle in the European Union banning the use of multiple voting rights (“MVR”) shares. Recently the European Commission issued a legislative package known as the Listing Act, which included a proposal for Europe-wide introduction of MVR shares for companies listed on SME Growth Market. During the legislative proposal, the European Parliament tried to turn the Commission’s proposal upside d ...