Dual Class Shares and the Need for Safeguards

Published April 2018 on a survey conducted 8 to 16 March 2018 in which 28,334 Asia Pacific members were invited and 454 responded, a 1.6 per cent response rate with a margin of error of plus or minus 4.6 per cent at 90 per cent confidence. Members split 47 per cent for and 53 per cent against dual class shares themselves (N=398), while 97 per cent believe additional safeguards are necessary if the structure is permitted (N=423); the top recognised risks are insufficient minority investor protection at 53 per cent and skewed proportionality between ownership and control at 52 per cent. On the safeguard most relevant to a controlled board, reverting to one share one vote for related party or substantial transactions, 65 per cent say it should be required and a further 28 per cent that it is somewhat appropriate (N=360), and 63 per cent of those accepting a maximum voting differential choose 2:1.