A coalition of global pension funds with combined assets of more than $1.25 trillion is launching an initiative to push back against the rise of dual-class shares.
The Investor Coalition for Equal Votes aims to advocate proportionate shareholder voting and the prevention of dual-class share structures without strict mandatory time-based sunset clauses. Its members are concerned that differential voting rights dilute the ability of public shareholders to influence company management or hold a company to account.
Founded by Railpen, the pension scheme for U.K. railways, and the Council of Institutional Investors, a non-profit association of U.S. benefit funds, the coalition’s membership also includes the Minnesota State Board of Investment, the New York City Comptroller’s Office, the New York State Common Retirement Fund, the Ohio Public Employees Retirement System and the Washington State Investment Board.
The ICEV’s first action will be to pursue a campaign designed to prevent companies from adopting a dual-class share structure during initial public offerings. This will take place through engagements with both private and public market participants as well as in policy forums.
It will be chaired by Caroline Escott, senior investment manager at Railpen. In a press release, she said the ICEV’s launch comes at a time when policy-makers are beginning to recognize the value of effective investor stewardship. “Voting is an important part of the stewardship toolkit, but dual-class share structures without automatic time-based sunset clauses mean long-term investors are trying to influence with one hand tied behind our backs.”