Naspers/Prosus: Autocracy in the Boardroom Rules

The concentrated value of South African internet giant Naspers and its multinational counterpart Prosus mirrors the distinctly autocratic nature of its major markets - China and Russia. This is not a mere coincidence. Up until recently, Russia held a substantial part in the value pie, with China continuing to contribute the largest slice.

The companies' governance style could be best described as an autocracy that slyly masquerades as democracy, apropos their substantial markets. It's just enough of a democratic façade to obtain regulator approvals for listing on public stock exchanges.

The underlying mechanism of control, however, remains firmly in the hands of a select few, thanks to the companies' intricate voting structure. This system essentially rubber-stamps any restructuring proposals, ensuring they achieve the necessary shareholder approvals.

It is the respective high-voting shares, 'A' for Naspers and 'B' for Prosus, that hold the power to decide the fate of every resolution presented since their public listing. Indeed, Naspers, which listed in 1995, and Prosus, since its listing in 2019, have deftly used this mechanism, leading to the consistent passing of each and every resolution.