In Conversation with Prof. Curtis Milhaupt

Dr. Tom Gosling interviews Curtis Milhaupt, the William F. Baxter-Visa International Professor of Law at Stanford University on his prize-winning paper, "The (Geo)Politics of Controlling Shareholders”, which won the 2024 ECGI Law Prize for the Best Paper in the ECGI Law Working Paper Series, 2023.

The key discussion points are:

• Scholarship on controlling shareholders has to date focussed on traditional agency problems relating to the conflict with minority shareholders rights and more recently on the benefits of enabling the idiosyncratic vision of controlling shareholders.
   
• This paper discusses a component currently missing from the debate: the political and geopolitical influence of firms with controlling shareholders and controlling shareholders themselves.
   
• Controlling shareholders of corporations appear in a number of guises and gain political influence in a number of ways around the world. Classic examples include the South Korean Chaebol, state controlled enterprises in China, Russia’s oligarch-klepto state capitalism, high tech data firms in the US or China.
   
• Each has a distinctive but material influence on politics or geopolitics, which can arise from direct relationships and economic influence, the desire of the state to use the corporation for political or social ends, or the corporation’s influence on critical enablers of political discourse, such as social media.
   
• The political influence of individual controlling shareholders in such cases far exceeds the power of a CEO in a firm with dispersed share ownership and no controlling stake. 
   
• Controlled firms and their controlling shareholders are playing a role and having influence in aspects of geopolitics ranging from national security to domestic politics to ESG.
   
• Study of such firms and the nature, extent, and channels of their influence is an important new field for corporate governance scholarship.

We hope you enjoy the conversation. For more interviews in this series, visit this page. 

ECGI Conversations is an interview series aimed at uncovering valuable insights, ideas, and perspectives from cutting-edge academic research. 

Hosted by ECGI Executive Fellow, Dr. Tom Gosling, this series delivers engaging discussions with leading experts in the field.

The ECGI Conversation Series is part of the Responsible Capitalism initiative.