The Investor Coalition for Equal Votes’ (ICEV) new report has showcased measures imposed by some of the world’s largest investors on companies that have unequal voting rights though the use of dual class share structures (DCSS). The report outlines the implications for companies with unequal voting rights for their relationships with institutional investors, finding that investors globally support a one share, one vote model, with this view becoming increasingly strengthened over time. In the report, investor respondents also highlighted that DCSS undermine confidence in companies’ corporate governance. Examples of voting sanctions from 31 of the world’s largest asset owners and managers highlighted by the report included votes against directors and board members at companies with unequal voting rights, and capital resolutions at companies with DCSS. ICEV has also engaged with EU, UK, and US policymakers to try to discourage the rolling back of equal voting rights, arguing that “robust investor protections” are “vital” for healthy capital markets. “As policymakers around the world roll back investor protections, it’s vital that independent shareholders think about how to most effectively wield available stewardship tools to ensure their voice as the owners of capital is heard,” said Caroline Escott, ICEV’s Chair and Senior Investment Manager at Railpen. “We encourage investors to be creative around how they use their vote and to continue to use this tool as a public expression of their concerns around unequal voting rights – as they would on any other issue that matters to financial outcomes for their beneficiaries and clients.” Co-founded by UK pension scheme Railpen and the US Council of Institutional Investors in 2022, the ICEV’s global investor members manage more than US$4 trillion in AUM.
