In the wake of Lord Jonathan Hill’s review of the UK listing regime, which was published last week, dual-class shares could become a bigger thing in London.
Hill recommended that companies on the London’s Premium segment be allowed to have dual-class structures, subject to a few important limitations, such as a five-year sunset and restricted circumstances when the additional power can be used.
It is a controversial area, since it goes against the purist approach to corporate governance, something that London has long touted as a defining characteristic of its regime.
And as I reported recently, dual-class shares have been a divisive topic for at least 100 years in the US, and all the more so in recent years as fast-growing companies have leapt at the chance to retain control in spite of listing.
The most aggressive give ordinary shareholders no voting rights at all, as in the case of Snap. Often there is no sunset, meaning founders and their families can control a company forever. And often the extra voting rights are able to be used in any vote submitted to shareholders, with no restrictions.
[The removal of the dual-class structure would be] ‘operationally beneficial to the company and our shareholders’
