Rereading the “One Share, One Vote” Principle: Is It Also a Matter of Competition?

Despite being a cumbersome principle of corporate governance, the “one share, one vote” principle à la Easterbrook and Fischel is constantly challenged by several attempts to circumvent the original structure of capitalism democracy, based on the provision (often a default provision) that no more and no less than one vote is attributed to each share. The possibility of adopting categories of shares with multiple voting rights and that of resorting to mechanisms that multiply voting rights upon the occurrence of specific conditions (oftentimes linked to a loyalty bonus for long-term shareholders), depends on the articles of association’s autonomy granted to joint-stock companies. Rigidly adopting the one share one vote principle de facto entails limiting such autonomy, and where not arising from the applicable regulations, such a limitation can be required by the listing market rules. And it is precisely the advisability of such exceptions—which Easterbrook and Fischel would have strongly refuted—that is the subject of the current debate in both Europe and the United States. Our paper attempts to examine the arguments put forward by those who do not condemn the tool of shares with multiple voting rights, either by issuing class shares or by awarding bonus mechanisms that enhance votes per share. On a closer look, the current debate highlights, even for listed companies, the benefits deriving from stable control and from strengthening those shareholders who are interested in long-term results. Nevertheless, as Easterbrook and Fischel would have stated, the need to protect the minority shareholders lingers in the background, as does the issue of when and to what extent these shareholders can express their views on the choice of the company in which they have invested to derogate from the “one share, one vote” principle. This is the reason for the interest in the Italian case, which is noteworthy both for the risks and the peculiarities of its shareholding corporate structure (and its effect on the increase of the voting right) and for the interesting and singular report that the Antitrust Authority sent to the Prime Minister last year, advising on the use of multiple voting shares as a tool even for (already) listed companies.