Interest types & definitions: voting rights, membership & roles vs mechanisms

[kd-ods]

In the Interest type codelist we have:

Type: voting-rights

Description: A controlling interest in an entity gained by holding shares. Defined as the right of shareholders to vote on matters of corporate policy, including decisions on the makeup of the board of directors, issuing securities, initiating corporate actions and making substantial changes in the corporation’s operations.

BO declarations We see in some countries (e.g. Latvia) a component of beneficial ownership being 'control as a member' or similar. Also, in the UK, being a member of a company limited by guarantee will confer voting rights. Shareholders of a company are its members and it's the membership (I think) that confers voting rights.

Suggestions/thoughts:

1. I think we may need to de-couple shareholding from the description of voting rights so that it's clear that this interest type is applicable in cases where voting rights are held via membership and not shareholding.

2. We have a general issue in the interest codelist of the values representing on one hand roles and on the other hand mechanisms (via which control is exercised or economic benefit extracted):

Mechanisms

• voting-rights
• appointment-of-board
• rights-to-surplus-assets-on-dissolution
• rights-to-profit-or-income
• rights-granted-by-contract
• conditional-rights-granted-by-contract

Roles

• senior-managing-official
• settlor-of-trust
• trustee-of-trust
• protector-of-trust
• beneficiary-of-trust
• shareholding (This is a funny one since the descriptor only mentions economic benefit from shareholding. So really it's a shareholder role which might or might not encompass the voting rights mechanisms - c.f. preferential stock)

Either

• other-influence-or-control
• other-influence-or-control-of-trust

There's an idea floating around of adding 'membership of board' to the codelist (reflecting, e.g., info that's collected in Armenia). And responding to what we see in BO declarations we might suggest adding 'member of entity' or similar to the codelist.

The difficulty comes in 'mapping' what we see in declarations on to these mechanisms and roles, recognising that the roles overlap with the mechanisms (see my point about shareholding above). Practically: if an implementer has a box on a form confirming that a BO extracts benefit via a role that we don't recognise in BODS, do we expect them to 'construct' that role using component mechanisms from the codelist? Or if enough jurisdictions have a similarly constituted role with regard to their companies, should we add that roles to the codelist? And ultimately is it worth trying to clarify in the schema how interest roles relate to interest mechanisms?