The only way that any shareholder with a minority stake, family or otherwise, maintains control over a company is because the majority shareholders relinquish their responsabilities.
It is these shareholders who need to be held to account!
Onésimo Alvarez-Moro
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Founders and their families often exert extraordinary power over public companies, even when they own only a minority of the shares
In mid-2005 few investors in Porsche would have guessed that only 18 months later their firm would be the dominant shareholder in Volkswagen. Then again, it is none of their business, because they have little say over the sports-car maker's managers or strategy. The Porsche and Piëch families have total voting control over the German firm, despite owning only half of its equity. The publicly traded shares, providing the other half of Porsche's capital, have no right to vote.
After a recent European ruling, the “VW law”, which prevents any shareholder from exercising more than 20% of the carmaker's votes, is likely to be repealed. If so, the Porsche and Piëch clans will have control of VW, because Porsche holds 27.4% of the voting shares. In shareholder democracies, as in political ones, poor turnouts mean that about one-third of the votes can grant control of a company.
That is not the full extent of the families' influence. VW has a 20% stake in Scania, a Swedish truck and engineering group, which has two classes of voting shares, one with ten times as many votes as the other. Thanks to these super-voting shares, VW has 35.3% of the votes in Scania. In other words, the Porsche and Piëch families will also control Scania, thanks to an economic stake in the firm of a mere 2%.
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