Dual-class shareholding structures are the antithesis of shareholder democracy – more of a corporate version of a gerrymander. But to get rid of them, you need a shareholder vote.
Minority shareholders in Rupert Murdoch’s News Corporation tried and failed this week to release the python-like stranglehold the nonagenarian media mogul has over the company. Realistically, these shareholders were never going to succeed.
Rupert Murdoch’s stranglehold on News Corporation remains despite the efforts of minority shareholders.Back in 2015, shareholders tried a similar trick. And while 90 per cent of non-Murdoch aligned shareholders voted to abandon the structure that gave Rupert Murdoch disproportionate control, it failed to pass.
There was certainly a conga line of investors and proxy advisers screaming from the rooftops that dual voting structures are the lowest standard of corporate governance. But that’s been the case for years. And Australian shareholder Perpetual Investments took a contrarian position and supported the Murdochs, reasoning that it allowed the company to make long-term decisions on capital.
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