Editing Openai/68df4a3a-428c-8013-a459-5cff8e17edde (section)

=== Assistant: Excellent question — this goes right into the history of U.S. ===
Excellent question — this goes right into the history of U.S. corporate governance and stock exchange rules. Let’s break it down clearly.

==== The New York Stock Exchange (NYSE) has traditionally promoted “one share, one vote” as a principle of shareholder democracy. ====

The reasons:
# Investor Protection - Multi-class structures give insiders disproportionate control relative to their economic ownership. - This can disenfranchise outside investors and increase the risk of management entrenchment.
# Market Confidence - The NYSE wanted to maintain its reputation as the most shareholder-friendly exchange. - By restricting dual- or multi-class stock, it reassured investors that listed companies would respect voting fairness.
# Prevent Abuse - Some companies in the past had tried issuing “low-vote” or “no-vote” stock to dilute shareholder power while insiders kept control. - The NYSE acted to prevent widespread erosion of voting rights.

==== Despite restrictions, the NYSE and regulators allowed grandfathered or special exceptions. ====
# Historical Structures (Ford, Family-Controlled Firms) - Ford had a dual-class structure in place long before the NYSE tightened its rules. - To avoid penalizing existing listed companies, the NYSE “grandfathered” them in (let them keep their structure).
# Public Policy (Media & Broadcasting) - U.S. law encourages diverse control of media and communications companies. - Some media firms (e.g., The New York Times, Washington Post) argued that dual-class structures help preserve editorial independence by protecting them from hostile takeovers or activist shareholders. - Regulators and exchanges allowed this as a policy exception.
# Competition with Other Exchanges - If the NYSE had banned all dual-class stocks, companies might simply list on rival exchanges (e.g., NASDAQ). - To remain competitive, the NYSE allowed limited exceptions.

==== - Restriction: To protect investors and maintain market credibility. ====
* Exceptions: To respect historical practices (like Ford’s family control), public interest (media independence), and competitive realities of the exchange business.

✅ In summary:
The NYSE restricted multiple classes of stock to uphold shareholder democracy and investor confidence. But it allowed exceptions for grandfathered companies (like Ford) and for policy-sensitive industries (like media) where control stability was considered beneficial. This compromise let the NYSE maintain credibility while avoiding the loss of important listings.

Would you like me to also explain how NASDAQ and newer exchanges (like Hong Kong/SGX) take a more flexible stance today, especially for tech companies like Google, Meta, or Alibaba?