Do we really need dual-class shares?

The recent roll-out of stewardship codes empowers shareholders, forcing managements to change behaviour

Every once in a while an idea takes hold which is supposed to be the panacea for a specific problem plaguing the local equity markets. Share buy-backs were seen to be the perfect tonic for reviving anaemic secondary markets in the late 90s: but markets began their secular uptick not when buy-backs were permitted in 1998, but a few years later when earnings picked-up steam. Dual-class shares are seen to be an answer to moribund IPO markets today. That investors should have more flexibility in raising money and investors in deploying funds is a given. But to argue that dual-class