Unequal Voting Rights: The European Experience Revisited

The full article is available on ISS-Corporate’s resources page.

Across much of Europe, unequal voting rights remain a common governance mechanism, demonstrating a willingness among companies and policymakers to trade shareholder equality for long-term ownership and stable corporate control.

Unequal voting rights can benefit or disadvantage minority shareholders depending on whether the arrangement encourages long-term value creation or simply entrenches management and founder control. Loyalty shares have become Europe’s preferred approach, granting additional voting rights to long-term shareholders, typically after two years of continuous ownership, without introducing separate share classes.

This blog post surveying unequal voting rights in Europe follows an earlier analysis looking at similar arrangements in 2023.

Key takeaways

• France remains Europe’s largest market for unequal voting rights, with nearly 70% of listed companies employing loyalty or enhanced voting structures.
• Italy has become one of Europe’s fastest-growing adopters of differentiated voting rights, with approximately 44% of listed companies utilizing enhanced voting mechanisms and one third employing loyalty shares.
• Unequal voting rights remain concentrated in Western European and Nordic markets, where family ownership, strategic shareholders and long-term capital structures remain common.
• Minority shareholders increasingly expect to see governance safeguards in place such as an independent board majority, the independent approval of related-party transactions, and the equal treatment for all shareholders.
• Germany, the United Kingdom, and several other Anglo-Germanic markets continue to exhibit limited adoption despite recent regulatory reforms to facilitate such structures.