Deviations from Ownership-Control Proportionality – Private Benefits and the Bigger Picture

The purpose of Wolf-Georg Ringe’s excellent paper is to revisit some of the aspects of the one share/one vote (OSOV) debate ‘in the light of the new protectionist fears that have surfaced since the beginning of the financial crisis.’ As he rightly notes, the recent financial crisis has given shape to new protectionist movements and could correspondingly revitalize deviations from a strict OSOV rule. Ringe observes that OSOV is applied to a varying extent by companies, depending on market pressures, takeover fears, and other external influences. He is raising the question why do attitudes to OSOV change, and how? It is a topical and important topic to write about and it is a pleasure to serve as a discussant of such a thoughtful paper dealing with the presence of deviations from OSOV. It is impossible to do this paper justice in the brief space I have available. The analysis by which Ringe comes to the above conclusion is a very exhaustive one. It has a strong legal component with plenty of references to previous cases and literature. My contribution will therefore be limited to additional clarifications. First, what I want to add is about two, which I am going to term deliberately and provocatively ‘hidden truths’ that I think this paper reveals, one about theory and one about practice in this area. I want to close also with a third potential ‘hidden truth’. Before I go on, I should add one caveat: we all know the old chestnut about the difference between theory and practice. That is, of course, that in theory, there is no difference between theory and practice; but, in practice, it is a completely different story. So, please take my distinction with the necessary grain of salt. The first ‘hidden truth’ relates to private benefits of control. The second highlights the changing landscape of the business world and the implications this has on the issues discussed. The third interesting issue, it seems to me, is the question of what difference it would make if one opts for describing the current situation as ‘important changes over time’, or as I will argue as ‘trends’