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Matt Levine

You Can’t Hide From the Corporate Cops

Also data science, Hovnanian, demo platforms, Jack Dorsey and bond liquidity.

The corporate police.

We have talked a few times recently about what it means to control a corporation. There are many theories: “Shareholder primacy” views shareholders as the owners of the corporation and directors and officers as their agents; “board primacy” views directors as the stewards of the corporation as an entity; modern “founder friendly” theories treat many corporations as the creation of entrepreneurs who can do what they like. But I keep coming back to a dumber and more practical theory, which is that if you have the keys to the front door—not in the sense of abstract ownership or entitlement, but in the sense of, the actual keys are in your actual pocket—then really you control the corporation. If the shareholders and directors and officers stand outside pounding on the door, and you don’t let them in, then what good does all their theory do them?