I think this is a very interesting and important topic. Some quick thoughts:
I didn’t understand the ‘share-specific obligations’ idea. How might such an obligation look like?
Re ‘company-wide obligations’: maybe that could also be implemented as a contract? E.g. the CEO signs a contract that says that if the company gets caught doing X, they will give a huge amount of money to a certain charity. (And then if the company ever gets caught doing X, the charity will have an incentive to sue the company for that money.)
Regarding different classes of shares: what about having a class of shares that have only voting rights and no dividend rights? Then the founder can keep a majority of the voting power without needing to also have a large financial stake. (I guess this situation can be approximated without inventing a new type of shares by having, say, 1000x more non-voting shares than voting shares.)
I didn’t understand the ‘share-specific obligations’ idea. How might such an obligation look like?
People who use the voting rights of those shares can’t vote for decisions that violate those obligations.
--
Nobody might want founding members / CEOs to retain a controlling interest on all matters, especially after the exit. The founding member themselves may not want this responsibility once they exit the company. People buying shares may not want it, and regulators may not like it because the agency problem becomes extreme here. (Cause here in the extreme, nobody who stands to earn the profits of the company has any say in how the company is run.) I’m not sure 1000x voting rights are even allowed in many countries for this reason, as far as I know there is a limit on how much extra voting rights supervoting shares can have.
In my proposal, the founders have control only to set some principles right before they leave, rather than control all aspects of the company forever.
I think this is a very interesting and important topic. Some quick thoughts:
I didn’t understand the ‘share-specific obligations’ idea. How might such an obligation look like?
Re ‘company-wide obligations’: maybe that could also be implemented as a contract? E.g. the CEO signs a contract that says that if the company gets caught doing X, they will give a huge amount of money to a certain charity. (And then if the company ever gets caught doing X, the charity will have an incentive to sue the company for that money.)
Regarding different classes of shares: what about having a class of shares that have only voting rights and no dividend rights? Then the founder can keep a majority of the voting power without needing to also have a large financial stake. (I guess this situation can be approximated without inventing a new type of shares by having, say, 1000x more non-voting shares than voting shares.)
People who use the voting rights of those shares can’t vote for decisions that violate those obligations.
--
Nobody might want founding members / CEOs to retain a controlling interest on all matters, especially after the exit. The founding member themselves may not want this responsibility once they exit the company. People buying shares may not want it, and regulators may not like it because the agency problem becomes extreme here. (Cause here in the extreme, nobody who stands to earn the profits of the company has any say in how the company is run.) I’m not sure 1000x voting rights are even allowed in many countries for this reason, as far as I know there is a limit on how much extra voting rights supervoting shares can have.
In my proposal, the founders have control only to set some principles right before they leave, rather than control all aspects of the company forever.