Blockholdings in Europe : An International Comparison

This paper summarises the main results of a research project, quot;Who Controls Corporate Europe?quot;, undertaken by teams of researchers from the various countries investigated, and coordinated by the European Corporate Governance Network in 1996-98. The project relied on a common shareholder voting power disclosure standard adopted by the European Union (comparable to Section 13D-3 of the General Rules and Regulations promulgated under the Securities Exchange Act of 1934 in the United States).The research found a very high degree of concentration of shareholder voting power in Continental Europe relative to the U.K., and even concentration in the U.K. is still considerably higher than in the United States. The size of voting blocks in listed companies reflects particular features of company law, securities regulation and the need for stock market liquidity in the different European Union Member States. Under current European disclosure legislation, the cash-flow stakes associated with a given degree of voting power do not need to be disclosed. The conclusions stress the need for better European disclosure and the need to study the relationship between large controlling shareholders and weak minority shareholders, as well as the relationship between management and dispersed shareholders