Chapter 17 Web Links

See Vodafone Plc’s articles of association at http://www.vodafone.com/.

For an empirical survey of multiple voting share and non-voting shares in the UK see Shearman & Sterling, Report on the Proportionality Principle in the European Union (http://ec.europa.eu/internal_market/), 77.

Germany, for example, does not allow multiple voting but does allow preference shares without voting rights (sections 134, 139 German Stock Corporation Act). The European Commission recently facilitated a review process to consider whether the European Union should mandate one share one vote. The concern was that as multiple voting rights result in disproportionality between economic interests and control rights they can be used to extract controlling shareholder agency costs (on such costs see Chapter 16). The review concluded that the evidence as to whether or not multiple voting rights had a positive or detrimental impact was inconclusive. See http://ec.europa.eu/internal_market/.

R. Gilson and D.M. Schizer, ‘Understanding Venture Capital Structure: A Tax Explanation for Convertible Preferred Stock’ (February 2002), Columbia Law and Economics Working Paper No 199; available at SSRN: http://papers.ssrn.com/.

The Association of British Insurers recommends that authority to allot should not typically exceed shares equal to one third of the company’s share capital, although following recent revisions such authority may be granted for shares equal to two thirds of share capital should such shares be issued pursuant to a rights issue. The ABI recommends that if such authority to allot shares in excess of the routine one third level is used, then all the directors of the company should stand for re-election at the next AGM: Association of British Insurers, Directors’ Powers To Allot Share Capital And Disapply Shareholders’ Pre-Emption Rights (2008) (www.ivis.co.uk/ ). These changes were introduced following the problems that arose for banks as a result of the rights issue timetable—see A Report to the Chancellor of the Exchequer: by the Rights Issue Review Group (November 2008) (www.hm-treasury.gov.uk/).

The membership of the Group consists primarily of investment fund managers, insurance companies, pension funds and banks, but also consists of representatives from business. Note that a connection to government rather than market regulation is generated through Financial Reporting Council representation on the Group: see www.pre-emptiongroup.org.uk/.