In a new paper, we seek to fill a gap in research on the possible benefits of dual class share structures and how they might promote innovation. We start with a bit of history.
Shareholder democracy has been fundamental to the global rise of equity markets since the mid-19th century. The rule of one-share, one-vote sought to balance two competing interests: 1) entrepreneurial insiders wanting to maintain their control of the firm after the public offering of shares, and 2) minority shareholders concerned about the expropriation of their funds through dividend rights, private benefits of control, etc. However, dual … Read more