The Freshfields team recently reviewed the governance terms of 86 sponsor-backed companies that went public between 2021 and 2025. In this blog, they share some of their key findings. Here are some excerpts, but read the full blog for more context:

 – 90% of the surveyed companies retained “controlled company” status under applicable listing standards following their IPO.

– 87% of surveyed companies granted sponsors the right to nominate or designate directors to serve on the public company’s board. 77% permitted the sponsor to designate a majority or supermajority of the board. In 26% of companies, sponsors secured the right to designate the chairperson of the board.

– 58% of surveyed companies went public with a majority-independent board despite having no obligation to do so. Nearly all (95%) established a compensation committee, and 90% had a nominating and governance committee in place.

– In 57% of surveyed companies, the sponsor retained the right to designate at least one member of the audit committee, and in 61%, the sponsor held the same right over the compensation committee.

– Almost half (47%) of the surveyed companies with shareholder agreements in place gave sponsors consent or veto rights over key corporate actions following the IPO [. . .] In the majority of cases where veto rights were granted (86%), the sponsor owned at least 50% of the outstanding shares at the time of the IPO.

– 93% of surveyed companies permitted stockholder action by written consent [. . .] 84% permitted shareholders to call special meetings. In both cases, these rights are structured for sponsor use and typically sunset once sponsor ownership falls below a defined threshold. 

– 77% of surveyed companies have a springing supermajority requirement for charter amendments, which takes effect once the sponsor’s voting power decreases to a certain level.

– 27% of the surveyed companies used an Up-C structure.

– 12% of surveyed companies had dual-class share structures at the time of IPO [. . .] Of the companies with high-vote/low-vote dual-class structures, nine out of ten were founder-led, reflecting that dual-class structures remain relatively uncommon in pure sponsor-backed IPOs.

– Meredith Ervine