One Share - One Vote: the Theory

The theoretical literature on security-voting structure canbe organized around three questions: What impact do nonvotingshares have on takeover outcomes? How does disproportional votingpower affect the incentives of blockholders? What are the repercussionsof mandating one share - one vote for firms' financing and ownershipchoices? Overall, the costs and benefits of separating cashflow and votes reflect the fundamental governance trade offbetween disempowering blockholders and empowering managers.It is therefore an open question whether mandating one share- one vote would improve the quality of corporate governance,notably in systems that so far relied on active owners.