Focus on ensuring safeguards for dual-class shares, not on ideologies

THE fierce debate over dual-class shares could heat up in the coming days with Singapore Exchange (SGX) expected to launch a public consultation by the end of the month.

Much of the argument thus far has had an unproductive focus on broad, ideological generalisations - should we have these in the first place? It is more useful to approach the debate as problem solvers - how should Singapore ensure adequate and enforceable safeguards for dual-class shares?

Dual-class shares have become a divisive issue in the market, and that is partly because the rhetoric often ignores the details. For example, some critics lament about how dual-class shares entrench management to the detriment of common shareholders without addressing the fact that the recommendations before SGX include a sunset mechanism to terminate the structure when control or management roles change. It is more fruitful to study the specific safeguards and see if they mitigate the risks sufficiently.