CFA Institute reiterates warning on dual-class share structures

Singapore

JUST days before Hong Kong stock exchange opens its doors to listing applicants with dual-class share (DCS) structures, CFA Institute maintained its stance against weighted voting rights (WVR), warning that the structure will weaken the system of checks and balances between shareholders and management.

The principle of "one-share, one-vote" is considered a bedrock of good corporate governance standards, it says. In contrast, DCS gives one group of shareholders control and voting power disproportionate to their shareholding.