The Value of Insider Control

45 Pages Posted: 8 Aug 2018 Last revised: 31 Mar 2019

See all articles by Benjamin Means

Benjamin Means

University of South Carolina School of Law

Date Written: July 19, 2018


According to conventional wisdom, insider control of businesses is detrimental to the interests of non-controlling investors. Family-run businesses, in particular, are seen as nepotistic and inefficient. Yet, commentators have overestimated the dangers of insider control and overlooked its potential benefits for all stakeholders. Controlling owners have a personal stake that gives them reason to identify with their business and to adopt responsible business practices capable of creating lasting value. A stewardship model of insider control helps explain the continuing vitality of family businesses as well as the success of recent public offerings by Facebook, Google, and Snapchat involving low-vote or no-vote stock. Consequently, this Article criticizes efforts to limit insider control categorically — for example, recent moves by stock exchanges to block companies that issue stock with unequal voting rights. To the extent controlling shareholders are tempted to abuse their control in particular cases, this Article contends that the fiduciary duties of care and loyalty provide an appropriate basis for judicial monitoring.

Keywords: insider control, family business, dual-stock, stewardship

Suggested Citation

Means, Benjamin, The Value of Insider Control (July 19, 2018). 60 William & Mary L. Rev. 891 (2019), Available at SSRN:

Benjamin Means (Contact Author)

University of South Carolina School of Law ( email )

1525 Senate Street, Room 314
Columbia, SC 29208
United States
(803) 777-3616 (Phone)


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