European and U.S. corporations that give insiders control of the votes will come under increased scrutiny in the coming months and years as big investors press for a one-share, one-vote structure.
At least that's according to Peter Bonfield, chairman of NXP Semiconductors NV (NXPI - Get Report) , who spoke at The Deal's annual corporate governance and activism conference in London. The Deal is a sister publication of TheStreet.
"There will be more scrutiny," Bonfield told The Deal after speaking at the conference. "Not scrutiny in that they are all doing badly, but scrutiny encouraging companies to do better, in terms of results for everybody."
Bonfield's comments come as institutional investors have put new pressure on companies giving insiders control of the votes.
A move by Snap Inc. (SNAP - Get Report) , the company behind the Snapchat app, to IPO earlier this year with only non-voting shares, acted as a galvanizing force among institutional investors who had been pushing for a return to the one-share, one-vote share structure. In recent months, major U.K. and U.S. indexes have issued rules that would prohibit companies like Snap from participating if they have either no public voting shares or even a very small float of voting shares.
Bonfield, who is the chairman of NXP Semiconductors, said that currently, some large insider-controlled corporations have been able to keep big shareholders at bay because they have performed well for investors. However, he added that it won't always be the case and that successful insider-controlled company will face competition and poor results, all of which will drive a potential shareholder revolt.
"The issue I think in the U.S. with Snap and Facebook (FB - Get Report) is that at the moment it works well because founders are still there and looking after the business," Bonfield said. "If you go a few years and Zuckerberg gets to be 95 years-old and not as focused on the business as he should be, it will raise the question of whether that structure still works."
For example, Facebook Inc. CEO Mark Zuckerberg has control of 60% of the company's votes but a much smaller percentage of its equity. Investors frequently point to Sumner Redstone and his family owning a controlling stake in media giant Viacom Inc. (VIAB - Get Report) as an example of insider control run amok.
As NXP Semiconductors chairman, Bonfield faces an activist situation, with insurgent manager Elliott Management Corp.'s Paul Singer seeking to disrupt the chipmaker's $47 billion sale to Qualcomm Inc. (QCOM - Get Report) .
The activist fund owns a 6% NXP stake and indicated last month that it was pushing for Qualcomm to pay more for its acquisition of the company. Elliott has suggested that it will negotiate with "potential acquirers."
However, Bonfield declined to comment, adding that it would be inappropriate to talk about the situation. "We haven't even gotten regulatory approval [for the Qualcomm deal]," he said.