The European Commission has published in December 2007 an impact assessment on the question of proportionality between capital and control in listed companies (commonly referred as to the “one share, one vote” problem). The document presents the pros and cons of possible policy actions, also including an evaluation of the consequences of not undertaking any regulatory action in this field. The impact assessment has been validated by the Commission’s impact assessment board. Having weighed the arguments advanced, Commissioner McCreevy has decided there is no need for action at EU level on this issue. DG Internal Market and Services has therefore stopped work in this area.

• Impact Assessment (December 2007)
• Opinion of the impact assessment board (November 2007)
• Statement of the European Corporate Governance Forum (September 2007)

In its May 2003 Action Plan on Company Law and Corporate Governance, the Commission proposed to carry out a study on the deviations from the principle of proportionality between capital and control existing in the Member States of the European Union. Stakeholders confirmed the need for such a study in their response to the Spring 2006 consultation conducted on the future priorities of the Action Plan.

The study commissioned in September 2006 was led by Institutional Shareholder Services (ISS), associated to a European network of leading academics, the European Corporate Governance Institute (ECGI) and the law firm Shearman & Sterling. The study provides a useful factual background to the issue of proportionality between capital and control, or the “one share, one vote” issue as it is more commonly referred to.

The report is accompanied by detailed surveys of the academic literature and of the empirical evidence on the “one share – one vote” issue as well as by a detailed comparative legal study covering 16 Member States of the European Union as well as Australia, Japan and the US.

Frequently asked questions

• Report on the proportionality principle in the European Union – ISS Europe, ECGI, Shearman & Sterling - 18 May 2007 (PDF - 3,3 MB)
   
• The Academic surveys:
  • The One Share – One Vote Debate: A Theoretical Perspective – Mike Burkart & Samuel Lee - May 2007 
  • Ownership Proportionality and Firm Value: The Empirical Evidence - Renée Adams & Daniel Ferreira - May 2007 
     
• The Comparative Legal Study:
  • The synthesis
  • Exhibit A - Methodology
  • Exhibit B - Regulatory framework for control-enhancing mechanisms: summaries (PDF - 8 MB)
  • Exhibit C - Part I and II - Legal study for each jurisdiction (PDF - 1,8 MB)
     

Call for tender MARKT 2006/15/F

"Proportionality between ownership and control in EU listed companies: external study "

Time-limit for receipt of requests for documents or for accessing documents: 22 May 2006
Time-limit for receipt of tenders: 29 May 2006