Reassessing Multiple Vote Share Structures in EU Capital Markets—Nordic Insights on Control Structures and Capital Market Development

Abstract

This article presents a legal and empirical analysis of multiple voting share structures (MVSS) among newly listed companies in the Nordic region over a ten-year period ending in 2024. Drawing on original data and theoretical insights, we advance three key findings that question core assumptions underlying the EU’s 2024 MVSS Directive. First, we document a marked decline in the use of dual-class structures at the initial public offering (IPO) phase, particularly in Sweden, where this retreat has coincided with market strength and high investor confidence. Second, the Nordic experience indicates that legal harmonization enabling MVSS may not, by itself, catalyse increased listing activity. Rather, newly listed firms in the Nordic region have tended to adopt governance models consistent with prevailing investor expectations, suggesting other contextual factors play a more decisive role in listing decisions. Third, our analysis confirms a persistent negative relationship between MVSS and firm valuation. Taken together, these findings challenge the MVSS Directive’s underlying rationale and suggest that permitting MVSS may undermine, rather than promote, the goals of the European Union (EU) Capital Markets Union (CMU). We conclude that the adoption of MVSS structures is not a necessary condition for market development and may, in fact, detract from long-term market performance and investor protection.