Why harmonising multiple voting rights for SMEs may be a bad idea

On 7 December, the European Commission presented the Listing Act package which contains three proposals. These aim to improve and simplify current EU law on listing securities to help small and medium enterprises (SME) make better use of European trading venues. Thus, they are an important and much needed step in the right direction.

The package also contains another proposal for a directive that aims to address differences across Member States’ national law on corporate governance and allow shares with multiple voting rights (MVR) for national SMEs that seek admission to an SME growth market. Although MVR shares are well known in many Member States as being not only harmless, but also a very useful tool, this Policy Brief argues that the proposal is an unjustified incursion into national law. It lacks the empirical and logical support necessary for EU harmonisation to proceed. If MVR shares are to spread across the EU, it should rather be by the power of example, and not by the brute force of harmonisation.

Jesper Lau Hansen is Professor of Law at the University of Copenhagen.

Apostolos Thomadakis, Ph.D. is Research Fellow at ECMI and CEPS