In the context of corporate governance, a Controlled Company is a public corporation where a single individual, entity, or group holds more than 50% of the voting power. This concentrated ownership structure grants the controlling party significant influence over board composition and major corporate decisions, potentially impacting operational and strategic direction.
Mechanism
The control mechanism derives directly from the distribution of voting shares. The controlling shareholder or group exercises their majority voting rights in shareholder meetings to appoint directors, approve mergers, and influence other fundamental corporate actions, often circumventing the need for broader shareholder consensus.
Methodology
Such companies frequently utilize exemptions from certain corporate governance requirements typically imposed on widely held public companies, such as the need for independent directors or nominating/compensation committees. This strategic governance design facilitates long-term planning and decision-making by reducing exposure to short-term market pressures, though it also presents considerations regarding minority shareholder protection.
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