S&P Queried over Dual-class Decision  

Asset owners have reportedly criticised a decision by S&P Global to reverse a 2017 policy barring new companies with dual-class shares from its indices. Dual-class shares typically grant enhanced voting rights to founders or early investors of companies than common stock issued at public offerings. Proponents of the structure say it allows companies, at early stages of growth, to not worry about pressure from shareholder activists or takeover attempts. But, the Washington-based Council of Institutional Investors (CII) says dual-class shares that give company founders unequal voting rights can increase risk to long-term investors by entrenching management and limiting disclosure. CII is co-leading the Investor Coalition for Equal Votes with UK pension fund Railpen which is seeking to curtail the use of dual-class share structures through time limits or “sunset clauses” on how long they are allowed. In a statement to Pensions & Investments, S&P Global said: “Companies with multiple share classes are part of the total investable universe and should be eligible for potential addition.” 

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