Wednesday, 17 March 2010


Interesting piece on the FT website about takeovers. Dunno about this though:
One of the more radical solutions has been suggested by Lord Myners, who has floated the idea that shareholders get preferential voting rights linked to the time they have held stock in a company.

Critics, including many long-term investors, say the proposal is unworkable and would turn on its head the UK’s long-established tradition of shareholder democracy based on one shareholder, one vote, as well as equal treatment of all shareholders.
I think that second para is basically... err... bollox. I have no doubt it is workable, and it's not overturning one share one vote, it's introducing a qualifying period.

What I find particularly odd about this is the fact that (typically anonymous) "long-term investors" are basically being fundamentalist about a principle that favours exit over voice. I mean if you are a long-term investor what's the problem? I think what this really demonstrates is that some right old guff is talked by some investors. They say all the right things about long-termism and ownership, but they act very differently in practice. This will be a big problem with the Stewardship Code I suspect.

The real issue with introducing a qualifying period is whether it would make any difference - and that isn't even discussed.

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