City & Corporate: ABI highlights lack of share 'democracy'

A third of European companies have share structures that prevent shareholder democracy, a study has shown.

Corporate governance firm Deminor Rating's survey for the Association of British Insurers (ABI) found only two-thirds of European companies operate a one-share, one-vote policy.

One fifth of the companies analysed issued shares with multiple voting rights, while one in ten companies imposed a voting-right ceiling that limited the right of individual holders to register their opinion by voting at general meetings.

While distortions in voting were most pronounced in countries such as the Netherlands and Sweden, the report is also of concern to IR professionals in the UK, where 12 per cent of firms did not apply the one-share, one-vote principle.

ABI director of investment affairs Peter Montagnon said: 'There is a long way to go before shareholder democracy is widely accepted in European markets.'

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