August 4, 2005
The battle among family members for control of the News Corporation is a reminder of why it is often a bad idea to separate voting control of a corporation from shareholders' economic rights. Those who control the board of directors start believing that control of the corporation is personal property that can be passed on to children. Empirical studies show that companies run by the next generation in a family corporation do not, on average, perform as well as other comparable companies. Setting up a corporation to be controlled by founders with supervoting stock (see Google) while a majority of the economic rights are held by others is an invitation to problems down the road.
August 4, 2005 | Permalink
TrackBack URL for this entry:
Listed below are links to weblogs that reference News Corporation: