Some of the UK’s largest pension schemes have launched a working group to improve voting disclosure at companies with dual-class share structures. The Governance for Growth Investor Campaign (GGIC) formed the group in collaboration with the International Corporate Governance Network (ICGN) to develop guidance on disaggregated voting outcomes disclosure, also known as class-by-class reporting. This collaborative effort aims to address the complexities introduced by recent regulatory shifts, ensuring that the voting process remains transparent and understandable for all stakeholders involved in the market.
New UK listing rules allow unequal voting rights
The initiative follows UK listing rule changes in 2024, which allowed companies to adopt dual-class share structures, or unequal voting rights, on the UK market. This regulatory adjustment opened the door for firms to establish different classes of shares that carry varying levels of voting power, often designed to protect founders’ control over strategic decisions. Under class-by-class disclosure, companies with multiple share classes would separately publish vote tallies for each class. GGIC said this would give investors and boards clearer visibility over the views of insider and independent shareholders, effectively separating the economic interest from the voting power to ensure no single group can dominate the outcome unnoticed.
Caroline Escott, chair of GGIC and head of investment stewardship and co-head of sustainable ownership at Railpen, will chair the group. Participants include the Governance for Growth Investor Campaign, the Council of Institutional Investors, the Investor Coalition for Equal Votes, the Corporate Governance Institute UK & Ireland, Railpen and Nest. The involvement of major entities like Railpen and Nest shows the significance of the task, as these organizations manage substantial assets and have a vested interest in ensuring that the UK market remains attractive and fair for long-term investment.
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Pension investors worry about control and ownership
The move follows growing concern among pension investors that a wave of large technology listings could leave passive savers exposed to companies where economic ownership and voting control are separated. This separation creates a potential disconnect between the financial returns expected by everyday savers and the actual governance direction of the companies they own. Jen Sisson, CEO of the International Corporate Governance Network, said transparent disclosure of dual-class voting outcomes was “critical to investor confidence and market integrity.” She added that the new template had “the potential to become a valuable global resource for improving transparency, accountability and trust across capital markets.” By establishing a standardized template, the working group hopes to provide a benchmark that can be adopted beyond the UK, supporting a more consistent approach to governance globally.
Escott said effective disclosure underpinned “the confidence and trust on which healthy capital markets depend.” She added: “Disaggregated vote disclosure will support better discussions between firms and their shareholders, strengthen market discipline, and ultimately contribute to sustainable long-term growth in the interests of companies, investors and everyday savers.” The group is expected to consult the wider market on draft guidance later this year. If successful, the changes could make it harder for founders to consolidate power while remaining publicly traded, potentially shifting the balance of power toward long-term institutional investors who hold the majority of shares but lack the dual voting rights.
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