Post by Sarah Wilson FRSA

So, SpaceX wants into the S&P 500. Tesla is already there. And a familiar chorus is defending dual-class shares as though a brand name index were sacred ground. But what is an index, really? It's a commercial data product: a methodology, a committee, and a customer base. It's not a law of nature. S&P banned new dual-class companies from the 500 in 2017, then quietly reversed it in 2023. Did governance theory change in those six years? No. Commercial pressure from founder-led tech did. The prize at stake is, of course, mechanical capital. Trillions track an "XYZ 500" index through #passiveinvesting, and inclusion triggers automatic buying. Which is exactly where the "private ordering" defence collapses. Founders and the market strike a bargain, the discount gets priced in, everyone is a grown-up, and happy days. Which is fine, if you can decline the deal. In reality, the bargain is voluntary for founders but invariably compulsory for those investors tracking a branded index whose rules changed without their informed consent. So here's the question nobody seems to be asking: why not two benchmarks? An XYZ 500 index of fully enfranchised shares, and one without. Providers could build it tomorrow (possibly even this afternoon); they already slice by sector, by carbon, indeed by anything that makes a market. But offering two solves nothing on its own. Flows follow defaults and if the enfranchised index is pitched as the "specialist" option and the all-comers version stays the headline, investors are conscripted just the same, but now with a fig leaf of "choice" that nobody exercised. So, let trustees actively choose - enfranchised or not. We'd soon learn how much a vote is really worth to the people spending other people's money on it. "What is an index" and "what is good #governance" are not two debates, they're one - and default indexes is where consent quietly dies. #stewardship #fiduciaryduty #corpgov