Dual-Class Shares: Who Should Have Them and Why

Dual-class share structures — where certain shares carry multiple votes per share — are designed to allow founders to retain voting control after multiple rounds of equity dilution through the IPO. The theoretical justification is that founders possess ‘idiosyncratic vision’ — a long-term, distinctive understanding of their business that public-market shareholders cannot replicate, and that requires voting control to execute against quarterly earnings pressure. The empirical evidence is mixed: some dual-class companies (Alphabet, Meta) have dramatically outperformed, while others have used voting control to entrench management and avoid accountability. The HKEX framework requires: WVR beneficiaries must be directors with a material contribution to the business; WVR shares must carry no more than 10 votes per share; WVR must lapse upon the beneficiary’s death, incapacity, or departure from the board; and certain matters (changes to constitutional documents, appointment of independent non-executive directors) must be voted on a one-share-one-vote basis. The decision to adopt a dual-class structure should be driven by a genuine need to protect long-term strategy, not by a desire to entrench control for its own sake.