# Voting rights `kaal:entity:voting-rights` **Status.** derived This node is assembled mechanically from the 23 claims that carry the concept tag `voting-rights`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 23 claims across 10 works, 2011 to 2025. **2011** - [1908473-006](https://wulfkaal.github.io/claims/1908473-006) [design/argued] -- The second trigger, which increases voting rights before resolution, should fire on evidence that conversion into equity was unsuccessful, that conversion came too early or too late, or that the firm's financial performance keeps trending downward. > Increasing the voting rights pre-resolution could be triggered by evidence that the conversion into equity was not successful, that conversion was triggered too early or too late, or that there is an overall continuing downward trend in the financial performance of the company. Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473 - [1908473-007](https://wulfkaal.github.io/claims/1908473-007) [mechanism/asserted] -- Beyond super-voting rights and dilution, the second trigger functions as a reorganization tool that operates independently of management decisions and of corrective action by regulators. > Besides providing for super-voting rights and increasing dilution, the second trigger would also be a reorganization tool independent of management decisions or corrective action by regulators. Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473 - [1908473-024](https://wulfkaal.github.io/claims/1908473-024) [design/argued] -- Departing from Coffee's design, super-voting rights should be allocated to contingent capital holders only if the first trigger failed to improve the institution's financial health; at the first trigger the new shareholder gets one vote per share. > Although we agree with the need for increased voting rights, the proposal in this Article would allocate super-voting rights to CCS holders only if the first trigger did not result in an improvement of the financial institution's financial health. Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473 - [1908473-025](https://wulfkaal.github.io/claims/1908473-025) [design/argued] -- To balance constituent incentives and prevent abuse, the voting rights increase should be calibrated so that contingent capital holders obtain a majority stake only in combination with the largest institutional shareholder. > To balance the constituents' incentives and avoid abuse,194 the voting rights increase could be calibrated to give CCS holders a majority stake in the company only with, for instance, the largest institutional shareholder. Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473 - [1908473-029](https://wulfkaal.github.io/claims/1908473-029) [mechanism/argued] -- Information asymmetries between market participants and a systemically important institution's management before default can be reduced if a financial weakening after conversion of contingent capital triggers a voting rights increase. > The information asymmetries between market participants and a SIFI's management before a SIFI defaults199 could be minimized if a financial weakening of the SIFI after conversion of CCS triggers a voting rights increase. Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473 - [1908473-030](https://wulfkaal.github.io/claims/1908473-030) [normative/argued] -- The second trigger voting rights increase should never actually be triggered; its function is to level the playing field between constituents, incentivize negotiation, and provide an alternative to reorganization. > The second trigger voting rights increase should never actually be triggered. Rather, it should help level the playing field between constituents and incentivize negotiation and provide an alternative to reorganization. Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473 - [1908473-031](https://wulfkaal.github.io/claims/1908473-031) [condition/argued] -- German corporate law permits increases in voting rights only in very limited circumstances, such as grandfathered multiple voting shares, so the proposed voting rights increase would require statutory reform in Germany. > German corporate law allows an increase in voting rights only in very limited circumstances, such as grandfathering provisions for shares with multiple voting rights that were created before the enactment of the Corporations Act Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473 - [1908473-032](https://wulfkaal.github.io/claims/1908473-032) [condition/argued] -- Allocating super-voting stock to contingent capital holders satisfies Delaware's legitimate business purpose requirement, because the allocation serves to avoid insolvency and dissolution of the institution. > Allocating super-voting stock, as proposed herein, would be for the legitimate business purpose of avoiding both insolvency and dissolution. Wulf A. Kaal, Christoph Henkel, Contingent Capital with Sequential Triggers (2011). SSRN: https://ssrn.com/abstract=1908473 **2012** - [1998455-021](https://wulfkaal.github.io/claims/1998455-021) [failure/argued] *(failure mode)* -- Where institutions hold each other's contingent capital and share similar risk profiles, they will be hesitant after conversion to vote for necessary organizational changes at a competitor or otherwise exercise their voting rights, because they are similarly exposed and may face reciprocal voting power. > With sim- ilar risk profiles and CCS positions in similarly exposed entities, SIFIs could be hesitant to vote for necessary organizational changes or otherwise exercise their voting rights on a competitor after conversion of CCS into equity. Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012). SSRN: https://ssrn.com/abstract=1998455 - [1998455-022](https://wulfkaal.github.io/claims/1998455-022) [failure/argued] *(failure mode)* -- Absent cross holdings, the opposite conflict arises: institutions holding a competitor's converted contingent capital could be tempted to exercise their voting rights against the interests of that competitor. > Without CCS cross holdings, SIFIs could be tempted to exercise their voting rights against the interests of the competitor if a con- version to equity should have been triggered. Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012). SSRN: https://ssrn.com/abstract=1998455 - [1998455-032](https://wulfkaal.github.io/claims/1998455-032) [design/argued] -- A contingent capital design that increases voting rights on conversion allows systemically important institutions to lower risk taking implicitly and to achieve an indirect, institution specific form of corporate governance reform through increased checks and balances. > With a design that increases voting rights, SI- FIs could implicitly lower risk-taking and allow for a form of in- direct and institution- specific corporate governance reform, i.e., increased checks and balances. Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012). SSRN: https://ssrn.com/abstract=1998455 - [1998455-033](https://wulfkaal.github.io/claims/1998455-033) [mechanism/argued] -- Because the threat of a change of control leads leaders to take fewer risks in order to avoid triggering conversion, a contingent capital design with increased voting rights allows those leaders to act more in accordance with their moral convictions and conscience. > It could allow SIFI leaders to increasingly act in accordance with their moral convictions and conscience because the threat of change of control may influence SIFI leaders to take fewer risks to avoid triggering the conversion of CCS and a possible change of con- trol. Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012). SSRN: https://ssrn.com/abstract=1998455 - [1998455-034](https://wulfkaal.github.io/claims/1998455-034) [mechanism/argued] -- Management incentives for risk control are heightened upon conversion, especially where management knows that holders of converted contingent capital would command a majority vote, with or without institutional shareholders. > More importantly, management incen- tives for risk control could be heightened upon conversion, espe- cially if management knows that CCS holders would have a ma- jority vote upon conversion (with or without institutional shareholders). Wulf A. Kaal, Initial Reflections on the Possible Application of Contingent Capital in Corporate Governance (2012). SSRN: https://ssrn.com/abstract=1998455 - [2061166-034](https://wulfkaal.github.io/claims/2061166-034) [design/argued] -- A second, sequential trigger placed before reorganization or resolution cushions the risk that policy makers misstructure the first trigger, absorbing the negative effects of inadequate or untimely conversion at the moment the institution needs capital. > Given the risk that policy makers may not structure the trigger appropriately, the negative effects of inadequate or untimely conversion of debt into equity at a time when the company requires a capital injection could be cushioned with a second trigger Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166 **2017** - [2922176-033](https://wulfkaal.github.io/claims/2922176-033) [predictive/speculative] -- It is feasible that in the not too distant future an artificial intelligence will hold an independent board seat with voting authority and be trusted to make smarter, data-driven choices than human directors. > In the not too distant future it seems feasible that artificial intelligence will have an independent board seat and may be trusted to make smarter – data-driven – choices than humans. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, The ‘Unmediated’ and ‘Tech-Driven’ Corporate Governance of Today's Winning Companies (2017). SSRN: https://ssrn.com/abstract=2922176 - [2922176-036](https://wulfkaal.github.io/claims/2922176-036) [definitional/argued] -- In a decentralized autonomous organization a series of smart contracts grants token holders voting rights, so the blockchain-based smart contract performs the function that articles of incorporation or bylaws perform in a conventional company. > A series of smart contracts granted token holders voting rights. In this respect, the blockchain-based smart contract mimics the role of articles of incorporation or bylaws. Mark Fenwick, Wulf A. Kaal, Erik P. M. Vermeulen, The ‘Unmediated’ and ‘Tech-Driven’ Corporate Governance of Today's Winning Companies (2017). SSRN: https://ssrn.com/abstract=2922176 - [3067615-003](https://wulfkaal.github.io/claims/3067615-003) [definitional/argued] -- ICOs cannot be qualified as donations and are therefore distinguishable from crowdfunding, because ICO participants acquire a financial stake in the company and, as the case may be, a right to vote on future decisions. > Unlike crowdfunding, ICOs involve a financial stake in the company including, as the case may be, the right to vote on future decisions. Therefore, ICOs cannot be qualified as a donation. Wulf A. Kaal, Marco Dell'Erba, Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags (2017). SSRN: https://ssrn.com/abstract=3067615 - [3067615-019](https://wulfkaal.github.io/claims/3067615-019) [failure/argued] *(failure mode)* -- Token holders, unlike shareholders in the traditional corporate infrastructure, cannot vote for or against directors or nominate directors, so ordinary ICO investors have no governance channel and simply must trust the promoters and their business intent. > Further limitations for token holders that amount to significant risk factors include token holders' inability, unlike shareholders in the traditional infrastructure, to vote for or against directors or to nominate directors. Wulf A. Kaal, Marco Dell'Erba, Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags (2017). SSRN: https://ssrn.com/abstract=3067615 **2018** - [3227933-032](https://wulfkaal.github.io/claims/3227933-032) [mechanism/argued] -- In a DAO, blockchain-based smart contracts granting token holders voting rights perform the function that articles of association or bylaws perform in a conventional corporation. > A series of smart contracts granted the holders of the tokens voting rights. In this respect, the blockchain-based smart contract mimicked the role of articles of association or bylaws. Mark Fenwick, Wulf A. Kaal, Erik P.M. Vermeulen, Why 'Blockchain' Will Disrupt Corporate Organizations (2018). SSRN: https://ssrn.com/abstract=3227933 **2021** - [3799320-030](https://wulfkaal.github.io/claims/3799320-030) [design/argued] -- In the bifurcated DAO of DAOs token design, non fungible reputation tokens give members voting rights while fungible reputation salary tokens let members earn a salary in proportion to their non fungible reputation holdings. > 1. the non-fungible reputation tokens give DAO of DAOs members voting rights, and 2. fungible reputation salary tokens allow DAO of DAOs members to earn a fungible salary in proportion to their non-fungible reputation tokens. Wulf A. Kaal, A Decentralized Autonomous Organization (DAO) of DAOs (2021). SSRN: https://ssrn.com/abstract=3799320 **2024** - [4941807-031](https://wulfkaal.github.io/claims/4941807-031) [design/asserted] -- Membership in the proposed DAO is constituted by holding REP tokens, which carry voting rights and a share of DAO revenue, and because validation pools revalue REP dynamically the governance model adapts to the collective decisions of members. > Membership in the DAO is signified by holding REP tokens, which grant voting rights and a share in DAO revenues. The dynamic valuation of REP tokens through validation pools allows for a flexible and responsive governance model that adapts to the collective decisions of the DAO members. Wulf A. Kaal, AI Governance Via Web3 Reputation System (2024). SSRN: https://ssrn.com/abstract=4941807 **2025** - [5454054-032](https://wulfkaal.github.io/claims/5454054-032) [condition/argued] -- Because Landreth holds that instruments carrying equity attributes such as dividends or voting rights are securities, LER rewards cannot include any such features and must function as independent loyalty perks. > This is reinforced by SEC v. Landreth Timber Co. (1985), where the court held that stock sales are securities if they carry equity attributes like dividends or voting rights. Therefore, LER rewards cannot include such features. Wulf A. Kaal, Liquid Equity Rewards (2025). SSRN: https://ssrn.com/abstract=5454054 - [5583610-016](https://wulfkaal.github.io/claims/5583610-016) [condition/argued] -- Under Blasius, LER should function as a last-resort tool justified by evidence of severe harm to the corporation, such as an activist's documented history of value destruction, so that courts can test whether less restrictive alternatives existed. > LER deployment must be justified by evidence of severe harm to the corporation. Examples may include an activist's history of value destruction. LER should be a last-resort tool, allowing courts to scrutinize if less restrictive alternatives exist. Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025). SSRN: https://ssrn.com/abstract=5583610 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/voting-rights.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.