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Brussels, 4 June 2007

Commission publishes external study on proportionality between capital and control in EU listed companies

The European Commission has published an external study on the question of proportionality between ownership and control in EU listed companies. The study finds that, on the basis of the academic research available, there is no conclusive evidence of a causal link between deviations from the proportionality principle and either the economic performance of listed companies or their governance. However, there is some evidence that investors perceive these mechanisms negatively and consider more transparency would be helpful in making investment decisions. The study was carried out by Institutional Shareholder Services Europe (ISS Europe), the European Corporate Governance Institute (ECGI) and the law firm Shearman & Sterling LLP.

Internal Market and Services Commissioner Charlie McCreevy said: "The study provides a useful factual background to the issue of proportionality between capital and control – known as the "one share, one vote" issue. Previously we didn't have a clear picture of how this issue affects European listed companies and whether it has an impact on their economic performance. Now that these facts are on the table we will examine, with an open mind, the question of whether there is a need for Commission action in this field".

The study will provide input for an impact assessment that the Commission will be carrying out between now and autumn 2007.


The study was commissioned in September 2006, following a public consultation carried out between December 2005 and March 2006 on future priorities in company law and corporate governance that confirmed the need for additional information on the factual situation in the EU regarding the issue of proportionality between capital and control. The objective of the study was to identify existing deviations from the proportionate allocation of capital and control across EU listed companies, and to evaluate their economic significance and whether such deviations have an impact on EU financial markets.

The objective was to obtain a picture that would be as comprehensive as possible. The scope of the study was therefore defined very broadly. It encompasses the review of such mechanisms as multiple-voting rights, voting caps and non-voting preferential shares, as well as of tools such as shareholders' agreements, cross-shareholdings and company pyramids.

The study scrutinizes the regulatory framework in 19 jurisdictions (including 3 from outside the European Union) and examines the situation of 464 listed European companies. The study also consists of a review of the available academic literature and empirical evidence on the proportionality principle as well as a survey of institutional investors whose objective is to assess what role the proportionality principle plays in their investment decision.

The study is available at:

See also FAQs (frequently asked questions) MEMO/07/222

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