One share - one vote : a european rule?

In this paper, I tackle the question whether one share - one vote should become a European law rule. I examine, first of all, the economic theory concerning one share - one vote and its optimality, and the law and econom
In this paper, I tackle the question whether one share - one vote should become a European law rule. I examine, first of all, the economic theory concerning one share - one vote and its optimality, and the law and economics literature on dual class recapitalizations and other deviations from one share - one vote. I also consider the agency costs of deviations from one share - one vote and examine whether they justify regulation. I subsequently analyze the rules implementing the one share - one vote standard in the US and Europe. In particular, I analyze the self-regulatory rules of US exchanges, the relevant provisions of the European Takeover Directive (including the well known break-through rule), and the European Court of Justice's position as to golden shares (which also are deviations from the one share - one vote standard). I conclude that one share - one vote is not justified by economic efficiency, as also confirmed by comparative law. Also the European breakthrough rule, which ultimately strikes down all deviations from one share - one vote, does not appear to be well grounded. Only transparency rules appear to be justified at EU level as disclosure of ownership and voting structures serves a pricing and governance function, while harmonisation of the relevant rules reduces transaction costs in integrated markets.
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Metadaten
Author:Guido A. Ferrarini
URN:urn:nbn:de:hebis:30-27628
URL:http://www.ilf-frankfurt.de/uploads/media/ILF_WP_047.pdf
Parent Title (German):Working paper series / Johann-Wolfgang-Goethe-Universität, Institute for Law and Finance ; 47
Series (Serial Number):Working paper series / Johann-Wolfgang-Goethe-Universität, Institute for Law and Finance (47)
Publisher:Inst. for Law and Finance
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2006
Year of first Publication:2006
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2006/06/12
Tag:European Takeover Directive ; break-through rule; corporate voting; golden shares ; multiple-voting shares ; non-voting shares ; one share-one vote
Note:
JEL Classifications: G32, G38, K22
HeBIS PPN:188743219
Institutes:Rechtswissenschaft
Dewey Decimal Classification:340 Recht
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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