Today's Financial Times reports that Charlie McCreevy, the European Union internal market commissioner, will seek to eliminate discriminatory treatment of shareholders by introducing the principle of “one share, one vote” across the Union. Tobias Buck's piece, EU seeks to end bias among shareholders, reports:
The effort would be the most radical project to date by the Commission in the field of corporate governance, and directly challenge many of the largest and most powerful companies in the region.
More than a third of Europe's 300 biggest companies including BP, British Airways, Carrefour, Volkswagen, Total and Carrefour issue priority shares and stock with multiple voting rights, or impose ownership ceilings and similar measures.
“It is my goal to get the one-share, one-vote principle accepted across the 25 member states,” Mr McCreevy told the Financial Times. He said he would not propose binding legislation on the matter, but would more likely issue a formal recommendation the Commission's preferred tool in the area of corporate governance.
He conceded that it would take time to achieve his goal, and the Commission would have to proceed cautiously. “What we are going to try and do is go the way of a recommendation in this area,” he said, adding that action was unlikely before next year.
“I come from this angle: the shareholder is king or queen. The shareholder should be able to exercise his rights, and there shouldn't be any restrictions. If you follow that principle, then other things fall into place after that.”
Premium shares with multiple voting rights are used in several continental European countries as a way of retaining majority control by families, banks or key shareholders. This proposal would see a major shake-up of shareholding interests if it succeeds.
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