The essential difference between dual ownership structure and traditional ownership structure

Two-tier ownership structure, that is, different rights for the same share, is a kind of ownership structure design mode corresponding to the traditional unitary ownership structure with the same share and the same right. Usually, it means that listed companies issue two types of common stock, A and B. Both types of common stock have the same economic rights such as the right to claim profit distribution, but Class B common stock is attached with super voting rights several times that of Class A common stock.

1, keep efficient decision-making. Under the mode of one share and one right, the voting rights required for corporate governance are evenly distributed according to the number of shares. However, with the rapid development of market economy, corporate governance, corporate decision-making and other matters increasingly need professional ability and intelligent market vision. The two-tier ownership structure allows shareholders with decision-making ability and preference to master a high number of voting rights. It is essentially an "elite governance" model, which makes decisions that affect the company's major development direction smoothly and timely, and plays an extremely obvious role in improving decision-making efficiency.

2. Improve governance efficiency.

Under the two-tier shareholding structure, the voting rights of the founding shareholders will not be gradually diluted with the financing of the company, and the founding shareholders are often more enthusiastic about the management of the company and more familiar with its advantages and disadvantages. Mastering the majority voting rights of the founding shareholders is beneficial to the company's long-term development strategy.

The disadvantage of the two-tier ownership structure is that it weakens the internal supervision mechanism of corporate governance. The two-tier ownership structure deprives ordinary shareholders of the right to decide on major decisions such as director elections, and the super voting shares held by the founders of the company enable them to control the board elections and determine the management of the company. In this way, directors and management form a group with the same interests, which weakens the independence of the board of directors and its internal supervision function to the management, resulting in the "failure" of the company's internal supervision mechanism.