Empty Voting: A European Perspective

After analyzing the causes and dangers of “empty voting”, i.e. the decoupling of voting rights and economic rights (risk) in listed companies, this article discusses measures to address the current lack of transparency as well as other more far-reaching measures to prevent abuses. This article focuses on a number of EU directives and regulations in the fields of company and financial law which have been adopted or amended recently or which are currently being prepared or reviewed. The main finding is that, so far, the European Commission has focused its attention largely on the problem of hidden ownership (through cash-settled derivatives) – which is the mirror image of empty voting – but, wrongly, not on empty voting itself. A number of avenues for regulation, and their respective costs and benefits, are explored. In addition, relevant national developments for Belgium, France, Germany, the Netherlands, the UK and the US are considered.