July 2021


Pro Governance

Promoting Good Corporate Governance









Bondholder Protection


Merger Regulation


Private Equity

Shareholder Activism

Shareholder Voting

Wider Share Ownership






Shareholder Voting

We reject all types of differentiated voting rights. In most cases they serve to protect the interest of a dominant owner. This does not mean, however, that we subscribe to the simplistic theory of 'one share, one vote' that is currently so popular in corporate governance circles, academia and politics. Super-voting shares are blatant discrimination and an abuse of the privilege that limited and public company status provides.

The one share, one vote rule sounds more than reasonable for the distribution of voting rights among shareholders. After all, what is seen as the best (or maybe least bad) system of government in the political field, should also be the most appropriate form of shareholder representation.

But even in politics this principle is only a rough guide to the reality. Various intended and unintended checks and balances exist and lead to a situation where the principle is undermined for good reason. The founding fathers of the US constitution
were deeply suspicious of unfettered democracy and maybe shareholders would be better served if the voting structure in public companies is designed as carefully as the constitution of the United States.

We are certainly not in favour of giving groups of shareholders (often founding families or other controlling owners) different voting rights. But more research is necessary and may well lead to the conclusion that the limitation of voting rights is well-suited to force all stakeholders to focus on the long-term well-being of the enterprise.




About Pro Governance

Our Mission is to campaign for the protection of investors and savers by promoting good corporate governance.

We also believe that the wider spread of share ownership is in itself a public good and may sometimes even be preferable to higher economic efficiency.

Shareholders in publicly listed companies are widely dispersed and cannot micro-manage the affairs of the companies they are invested in. The international nature of today's shareholder registers make this also impossible for large institutional investors.

On the other hand, abuses that have developed over the past few years make it imperative that company managements are supervised in a more efficient way.

Tax incentives and institutional constraints have favoured the growth of large institutional investors at the expense of small individual shareholders. This makes it more important than ever that these investors behave like fiduciaries and have the interests of their clients at heart.

This means that the business of money management cannot be treated like any other profit-maximising business. Like the medical, legal or academic professions the interest of the clients has to have priority when critical decisions have to be made with regard to companies the money managers are invested in.

We at Pro-Gov think that the establishment of an effective international forum combining representatives from the national organisations of individual shareholders and investors will be an effective step in the direction of improving corporate governance.

At the moment the corporate Governance discussion is limited to academics, journalists in the quality business press, institutional shareholders and companies and their business associations as well as politicians. The one party missing on the table are the real investors who - with some exceptions - voiceless in the debate.

"The scandal isn't what's illegal; it's what's legal"
(Michael Kinsley)






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