More information is available on ICEV's website, including links to the work we have done so far, here: www.icevequalvotes.org/ 

Becoming a member

To join the coalition or find out more about membership, please contact Caroline Escott, Railpen, at [email protected] and / or Glenn Davis, Council of Institutional Investors, at [email protected]. Alternatively, you can use the 'Join ICEV' form at the bottom of our website (linked above).

Membership is available to long-term institutional investors, including asset owners and asset managers, as well as investor-governed, non-profit organisations that support ICEV's mission. There are no regional or jurisdictional limitations on membership eligibility. 

Please note that members can:

• Participate as much or as little as they are able to
• Abstain from participating in ICEV letters or engagements

Our approach

ICEV encourages companies to adopt a ‘one share, one vote’ capital structure, or at the least to put in place time-based sunset provisions of seven years or less from the time of public listing. This is because unequal voting structures are most problematic when they extend beyond companies' earliest growth stages.

In our report Undermining the Shareholder Voice – the risk and risks of unequal voting rights (published November 2023), ICEV makes recommendations to support the phasing out of DCSS.  We also recommend that additional safeguards are put in place for investors during the period prior to any sunset trigger date, or in the absence of a sunset clause. We believe companies with dual-class or other unequal share structures should report publicly and accessibly on the nature of their share structure.  

‍We seek to engage with the following:

• Companies before they list – when they're still open to conversations about capital structure
• IPO advisers – whose advice on capital structure is heeded by pre-IPO companies
• Policymakers – for the advancement of equal voting rights regulation and legislation where practicable and most effective
• Commentators – influencing the 'mood music' around the role equal voting rights play in supporting thriving capital markets

ICEV is most active in the US and UK – two key jurisdictions for dual-class share structures (DCSS). The US was the birthplace of DCSS and both the New York Stock Exchange and NASDAQ have allowed unequal voting rights for decades. The UK has long been considered a beacon of strong corporate governance worldwide, so recent moves by policymakers to consider allowing unequal voting rights are deeply concerning and could help encourage a regulatory ‘race to the bottom’.

Background

In 2022, Railpen, the Council of Institutional Investors and several US pension funds joined together to set up the Investor Coalition for Equal Votes (ICEV) as a collaborative engagement initiative. Our mission is to promote the adoption of capital structures to ensure that equity positions with substantially similar economic rights provide identical voting power on a share-for-share basis (Equal Voting Rights).

Today, ICEV is made up of a group of global pension funds and asset managers with over $3tn of assets under management – all of whom share the same concerns around the long-term effects of misalignment between invested capital and shareholder voting rights, and the consequences for long-term financial performance and good member outcomes.

We believe it’s essential that all shareholders are given a fair and proportionate voice through their voting rights. Being able to vote for, or against, a company at its Annual General Meeting (AGM) helps us positively influence a company’s behaviour and provides a safety net to hold company management to account, where necessary.

Why are we concerned about unequal voting rights?

Some companies operate with multiple classes of shares where the owners of certain share classes, typically founders or insiders, benefit from superior voting rights at a level disproportionate to their equity shareholding. This is most commonly seen with founder-led companies that publicly list with a capital structure with higher voting rights per share for the founder relative to other public equity investors.

We believe strongly that when a company taps the capital markets to raise money from public investors, those investors – as owners of the company – should have a right to vote in proportion to the size of their holdings (and in proportion to the economic risks that they bear as owners). 

A single class of common stock with equal voting rights provides the voting mechanisms to ensure the board of directors remain accountable to the majority of the shareholders. This accountability is vital to ensuring that the board – and by extension the management of the company – remains aligned with the interests of the shareholders.

Boards cannot carry out their fundamental oversight purpose if capital structures are designed specifically to render founders, their favoured board members, and their favoured managers, unaccountable to the holders of a majority of outstanding shares.

ICEV’s concerns are supported by a body of empirical research that suggests that any potential financial advantages of a dual-class structure recede over time, usually within a few years following public listing.

There’s also clear evidence that management and boards at companies with DCSS are more insulated from the perspective of independent investors – whose views are more closely aligned with the needs of beneficiaries and clients. For example, it is generally more difficult for shareholders to ensure that boards are appropriately structured, to challenge capital expenditure decisions or to access robust financial and other information about the company.

Who are members of ICEV?

ICEV members currently include the following:

• Railpen (Chair)
• Council of Institutional Investors (Vice-Chair)
• California State Teachers' Retirement System (CalSTRS)
• Ethos Engagement Pool International
• Ethos Foundation
• Downing LLP
• Florida State Board of Administration
• Fulcrum Asset Management
• Los Angeles County Employees Retirement Association (LACERA)
• Minnesota State Board of Investment
• NEST
• New York State Common Retirement Fund
• Office of the New York City Comptroller
• Ohio Public Employees Retirement System
• People's Partnership
• PhiTrust SA
• Washington State Investment Board
• Wespath Benefits and Investments

We're also grateful to our supporters, which includes the International Corporate Governance Network (ICGN) and the Australian Council of Superannuation Investors (ACSI).

Antitrust disclaimer

In line with ICEV’s Antitrust policy, the responsibility lies with each of the individual ICEV members to understand and adhere to all laws and regulations applicable to them. This includes, but is not limited to, relevant antitrust and competition laws.

ICEV members explicitly avoid coordinating on company-specific investment decisions, meeting-specific proxy voting decisions or any other business-related decisions. ICEV’s members are responsible for their own investment, voting and business decisions and must always act completely independently to set their own strategies, policies and practices based on their own best interests.

ICEV facilitates the exchange of public information, but members must avoid the exchange (including one-way disclosure) of non-public, competitively sensitive information, including with other members and participants in engagements.