Enhancing Multi-Class Share Disclosures Act

Floor Speech

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Mr. MEEKS. Mr. Speaker, I rise today to urge support of H.R. 2795, the Enhancing Multi-Class Share Disclosures Act.

I thank Ranking Member Waters for her leadership, her continued support of this legislation as she just articulated, as well as Chairwoman Wagner, for her support so that we really have a bipartisan bill coming together for something that is really important.

This bill, as indicated by both Ms. Waters and Mrs. Wagner, closes documented gaps in transparency around multi-class governance and structures for the benefit of traditional investors, which is important because traditional investors often come from Main Street, and we want to make sure that Main Street has all of the information it needs to go further with Wall Street.

These structures, while they may add value, can pose, as indicated, significant risks for investors. As also indicated, multi-class governance structures allow corporate insiders or beneficial owners to own an outsized amount of voting power relative to their shares. This could limit other investors' abilities to influence management, direct strategy, and hold misaligned boards accountable. Accountability, having a voice, that is what this bill does.

Let me be clear: I want to make sure that multi-class governance structures, while they do have their value, we know reforms are necessary, and their outright ban would do little for Main Street investors looking to gain a return on their next startup. We have seen companies employ these structures to access the public markets and open their profits to everyday investors, while still retaining the vision and direction of their founders.

Information is at the core of any well-working capital market system.

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Mr. MEEKS. As I said, we have seen companies employ these structures to access the public markets and open their profits to everyday investors. That is what it is about, the everyday investors. Open those profits so that we can see what they are, while still retaining the vision and the direction of their founders so it doesn't stop it. It makes sure there is transparency and information.

Information is at the core of any well-working capital market system and more robust information is always best for investors. This bill will ensure that Main Street can make an informed decision as they look to invest in tomorrow's next successful business.

Mr. Speaker, I urge all of my colleagues to support this bill.

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