The (Geo)Politics of Controlling Shareholders

Corporate governance scholarship on controlling shareholders has focused almost exclusively on shareholder wealth diversion (“tunneling”) and creation (“idiosyncratic vision”). This essay shifts the focus to the fusion of political and economic power inherent in corporate control, and the wide-ranging geo-strategic and domestic political implications of this fusion beyond the boundaries of the firm. The approach is illustrated with examples from a variety of corporate capitalist systems operating globally today, and a survey of the numerous policy domains in which firms with controlling shareholders are key protagonists: national security, economic sanctions, stock exchange competition, corporate influence on domestic political systems, and ESG. Particularly in a period of heightened concern for corporate externalities and non-financial interests of stakeholders, analysis of the (geo)political dimensions of corporate control should be within the purview of corporate law scholars.