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Are loyalty voting rights efficient?

Date: 13/07/2018
Subject: Company law
Written by: Corporate Finance Lab

How effective loyalty are voting rights, as proposed in the Belgian Company Law Reform, in addressing the short-termism problem. In this blog post, I argue that loyalty voting rights are unlikely to increase the holding periods of investors, as the evidence suggests that they are only used by the controlling shareholders. However, loyalty voting rights will allow a controlling shareholder to insulate itself from short-term market pressures. On the other hand, insulation also comes with ..

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