Introduction of double voting rights in listed companies in Belgium: Parliament listens to the voices of minority shareholders

On the 15th of October 2018, Deminor sent an open letter opposing the draft law reforming company law including the aim to introduce a double voting right for “loyal” shareholders in listed companies.  This open letter was sent to the Minister of Justice, the Chairman of Parliament and the Chairman of the responsible parliamentary committee.

In the first version of the bill, a simple majority of 50% plus one share was sufficient to include double voting rights in the company’s articles of association. After a transitional period until 30 June 2020, the majority requirement was to be raised to two thirds, well below the 75% threshold required for other amendments to the Articles of Association.

Deminor strongly criticised this provision and received the support of the International Corporate Governance Network (ICGN) and Eumedion, organisations bringing together institutional investors.

The Parliamentary Committee on Commercial and Economic Law seems to follow Deminor’s position in this.

In its version adopted at first reading on 14 November 2018, the draft law provides that a qualified majority of 75% will be required to incorporate double voting rights in the articles of association of a listed company (as in other companies), in the same way as any other amendment to the articles of association. In addition, the transitional provision lowering the threshold to a simple majority has been removed from the draft.

We are pleased that the Parliamentary Committee took into account the arguments raised by Deminor and we are convinced that this revision of the text is favourable to Belgian companies and the Belgian stock market. Deminor hopes that this amendment will be maintained at second reading and in plenary.

Deminor, along with many institutional investors, remains firmly opposed to the introduction of double voting rights, even with a 75% majority. There are indeed many arguments in favour of maintaining the principle of “one share, one vote” in our company law.

However, a victory was achieved by restoring the 75% threshold.

Deminor’s letter of October 15, 2018 is online available via the following link:

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