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Working Papers (2007), ESSEC Business School

One Share-One Vote, the New Holy Graal?

More than one third of companies listed in the FTSE EUROFIRST 300 index are governed accordingly to principles differing from the One share - One vote standards. These exceptions could be illustrated by several practices. The question at stake is to know if the application of the One share - One vote as a European standard would be justified with regard to European Law, including its underlying principles, and to economic efficiency in general. Indeed, One share - One vote enthusiast affirm that this rule participates to corporate democracy and contributes to increases firms' performance. Then, the application of One share - One vote, by the cancellation of certain rights attached to a share, would violate a democratic principle, founder of the European Union, and dedicated by Member States Constitutions, known as private property. It would have, as a result, an unjustified, not compensable and therefore, illegal expropriation. The respect of principles such as equity, shareholders general interest and company's interest, combined with transparency rules and protection of minority shareholders leads us to favour the second supposition. The One share - One vote rule could definitely be necessary for market readability purposes. But, some exception to this rule might be justified with regard to the company's interest. Therefore, some flexibility principles should remain. A dogmatic approach focused on shareholders, or certain type of shareholders, would disadvantage the development of the internal market and could not be justifiable on a legal ground.

DE BEAUFORT, V. (2007). One Share-One Vote, the New Holy Graal? ESSEC Business School.

Keywords : #Démocratie-actionnariale, #Gouvernance-d'entreprise, #Un-titre, #une-voix