LL.M. (Commercial Law) / In order to promote sound corporate conduct, it is essential that shareholders actively participate in the governance of the company. The primary mechanism to achieve this lies in the shareholder’s right to vote at meetings. However, an analysis of the nature of shares, and the history surrounding the introduction and development of uncertificated shares in particular, reveals a structure that often interposes multiple nominees between the issuing company and the underlying investor. Such a structure has the potential to dispossess the underlying investor of his rights, which may have concomitant negative effects on the corporate governance of the company. A comparative study of the legal framework for uncertificated shares in the United States, the United Kingdom and South Africa reveals varying degrees of protection for the underlying investor. Unfortunately, none of these countries has resolved the problem completely, and it is suggested that a move to a direct, transparent holding model, where the underlying investor, rather than an intermediary, is recorded in a company’s share register, is a better solution.