Up the Hill and Down Again

Constraining Dual-Class Shares

Bibliographic Data

ID21299897
AuthorsBobby V Reddy (0000-0002-6519-3160, Churchill Hospital, corresponding author)
Year2021
Volume80
Issue3
Pages515-551
Publication date2021-11-01
Open AccessYes
TypeARTICLE
VenueThe Cambridge Law Journal (JOURNAL)
Journal identifiersISSN: 0008-1973 • E-ISSN: 1469-2139
PublisherCambridge University Press (CUP) (PUBLISHER)
DOI10.1017/s000819732100101x
OpenAlexW4205504246
LanguageEN
Citations received1
References cited2

The headline recommendation of Jonathan Hill's 2021 UK Listing Review was that dual-class shares structures be permitted on the London Stock Exchange's premium tier. The aspiration was to encourage more high-quality UK equity listings, particularly of high-growth tech-companies, for which dual-class shares are especially beneficial. Dual-class shares allow founders to list their companies, and retain majority-control, while holding significantly less of the cash-flow rights in the company. However, in the UK, dual-class shares are usually discussed in qualified terms, in an attempt to placate sceptical institutional shareholders. Using the UK Listing Review as a platform, this article explores the constraints commonly proposed to be attached to dual-class shares, and argues that, although it is important to protect public shareholders, constraints must not be too severe. A balance must be respected, otherwise UK initiatives to relax rules on dual-class shares could deter the very companies they are intended to attract

Advertising · Business · Common stock · Corporate governance · Dual (grammatical number) · Economics · Equity (law) · Headline · Initial public offering · Listing (finance) · Political science · Shareholder · Accounting · Corporate Finance and Governance · Finance · History · Law · Private Equity and Venture Capital · State Capitalism and Financial Governance

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