The Proprietary System

This chapter examines the role and structure of ownership in corporate governance. It emphasizes the importance of the distribution of ownership among different stakeholders and the implications for corporate control and management. The chapter also examines the dynamics between controlling (command) capital and non-controlling (controlled) capital, highlighting the potential for conflict and the importance of protecting minority shareholders. It discusses various minority protection mechanisms, including public tender offers, “say on pay”, list voting, and electronic voting. The chapter also examines the impact of institutional investors on corporate governance and explores the dynamics of power relations within ownership systems, illustrating how conflicts between majority and minority shareholders shape governance outcomes.