I agree that the problem (that investors will prefer to invest in non-signatories, and hence it will reduce the likelihood of pro-social firms winning, if pro-social firms are more likely to sign) does seem like a credible issue. I found the description of the proposed solution rather confusing however. Given that I worked as an equity analyst for five years, I would be surprised if many other readers could understand it!
Apologies that this was confusing, and thanks for trying to deconfuse it :-)
Subsequent feedback on this (not reflected in the report) is that issuing low-value super-junior equity at the time of signing (and then holding it in trust) is probably the best option for this.
Apologies that this was confusing, and thanks for trying to deconfuse it :-)
Subsequent feedback on this (not reflected in the report) is that issuing low-value super-junior equity at the time of signing (and then holding it in trust) is probably the best option for this.