Deminor’s open letter against double voting rights

Deminor sent an open letter to the Minister of Justice and the President of the Parliament on 15 October 2018 protesting the introduction of double voting rights for "loyal" shareholders at Belgian listed companies. Deminor's position is supported by the International Corporate Governance Network, the international association representing all influential institutional investors and assets under management in excess of US$34 trillion. The Council of State is also very critical of the conditions proposed in the draft bill.

The Belgian company law is being revised. The draft bill is ready and will be shortly discussed before Parliament. Nobody doubts the good intentions of our Minister of Justice, Koen Geens, and the necessity to ease and simplify the current legislation, especially for unlisted companies.

However, in June, we were already very critical of the proposed introduction of double voting rights at listed companies (read here) because this violates the ‘one share one vote’ principle. This principle is very important for minority shareholders, in particular for large international institutional investors, and influences their investment decisions. Exemptions from this rule are strictly regulated.

According to Deminor, owning the majority of the capital or the voting rights is not necessary at all to maintain a company’s embeddedness. No one denies the importance and added value of controlling shareholders but, in many companies, this is possible with less than 50% of the voting rights. We believe that granting double voting rights to loyal (controlling) shareholders is therefore not necessary at all; this could precisely have the opposite effect. The Belgian stock market would become much less attractive for international investors who take into account the protection of their capital and voting rights when making investment decisions.

Under pressure of FEB, the government has gone one step further: listed companies which want to grant double voting rights may amend their articles of association with a simple majority vote (50% plus one share). In Belgian law, any amendment of the articles of association requires a majority of at least 75%. After a transition period until 30 June 2020, the majority requirement would rise again from 50% to two-thirds, but this stays below the current 75% threshold.

In its critical opinion of 13 September, the Council of State has drawn the Minister and his staff’s attention to the unconstitutional nature of the planned conditions in the draft bill.

The Council of State emphasizes the importance of protecting investors and states – like Deminor – that there are not enough convincing arguments to justify such a substantial deviation from standard majority rules.

Will the Belgian Parliament ignore this opinion? It would not be the first time that the advice of the Council of State is not followed.

Deminor made its position clear in an open letter addressed to the Minister of Justice and the President of the Belgian Parliament on 15 October 2018. Meanwhile, the largest investor organization in the world, the International Corporate Governance Network, has already committed to supporting Deminor’s letter.

Click here to read Deminor’s open letter of 15 October 2018.

If you agree with the content of this letter and would like to support Deminor’s efforts, please contact us at


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