Dual Class Shares: Luciana Maskow
Who Really Controls a Company? The Growing Fight Over Shareholder Voting Power.
One question is stirring up boardrooms and investors alike: who really controls a public company? As institutional investors and everyday shareholders push for more influence, the spotlight has turned to how voting power is structured, and whether founders should still hold the upper hand long after a company goes public. At the center of it all is a tension that’s not going away anytime soon: accountability vs. vision.
The Rise (and Resistance) of Dual-Class Shares.
Many of today’s biggest tech companies, including Meta and Alphabet, use what’s known as a dual-class share structure. In simple terms, not all shares are created equal. Founders and early insiders often hold shares with multiple votes, giving them outsized control, even if they own a smaller percentage of the company economically.
To critics, this setup undermines democracy in corporate governance. But to founders, it’s something else entirely: protection. Protection of a long-term vision. Protection from short-term market pressure. And, in their view, protection from investors who may prioritize quarterly returns over building something lasting.
It Starts Before Companies Go Public.
Here’s something that often gets overlooked: this issue doesn’t begin on the stock market. Many dual-class structures are actually created while companies are still private. Founders negotiate control early, often with venture capital investors, through special share classes or voting agreements. The difference? In private companies, everyone at the table agrees to those terms upfront. But once a company goes public, that same structure is passed on to millions of new investors who have no ability to renegotiate it. What was once a private arrangement becomes a public governance issue—and that’s when scrutiny really kicks in.
Investors Are Pushing Back.
Recently, a loose but powerful network of investors has started pushing for change. This isn’t one formal group, it’s a mix of major asset managers, pension funds, and governance advocates working in parallel.
Big players[1] are increasingly supporting proposals to:
Phase out dual-class structures over time.
Increase transparency in how votes are counted and reported.
Give shareholders more say on environmental and governance issues.
So… Who’s Right?
It depends on what you value more. If you lean toward shareholder rights, the argument is straightforward: concentrated voting power can reduce accountability. If investors supply the capital, shouldn’t they have a real say in how the company is run?
But the founder perspective is just as compelling. Many founders see themselves as stewards of an idea, not just managers of a business. Without control, they argue, companies risk drifting away from their original mission or making safe, short-term decisions to satisfy markets. And history offers examples on both sides: companies that thrived under strong founder control and others where lack of accountability became a problem.
Why This Debate Is Getting Bigger?
This isn’t just a Silicon Valley issue anymore. Companies across finance, media, and retail are being judged more closely on how power is distributed. Regulators in the U.S. and Europe are also paying attention, trying to strike a balance between protecting investors and not discouraging founders from taking companies public in the first place.
The fight over shareholder voting power isn’t just about technical governance rules, it’s about the future of how companies are built and led. There is no one-size-fits-all answer. That’s where experienced legal counsel plays a key role.
From structuring dual-class shares to advising on governance reforms, we can help companies design frameworks that protect a founder’s vision while ensuring fairness, transparency, and accountability for investors, so neither side is left exposed.