| The way modern stock ownership is structured makes it almost impossible for shareholders to exercise any meaningful control. Shareholders have no access to insider, commercially confidential information - so shareholders don't get to change the captain until after the ship's hit the iceberg. If I have shares in a video game company and the inept boss didn't organise enough testing so the game's got loads of major bugs? Well, I only find out after the damage is done. Is Gelsinger fucking up the delivery of 18A? I have no idea! Meanwhile, individual shareholders' power is incredibly diffuse. The smart investor has a diversified portfolio, and even if I've literally got a million dollars invested in Intel, I still only own 0.0011% of the company. Maybe I should coordinate with the other investors, you say? Get together with 1000 other similar investors, and we've got 1% between us? It's impossible, because they're all anonymous. There isn't anywhere I can rally the other shareholders. And on top of that, loads of companies have dual-class share structures specifically designed to stop shareholders having any say. Whether you're invested in Facebook, FitBit or Ford - good luck exercising control when insiders' shares have 10x the votes yours have. And that's without getting into passive investors and pension funds. If I don't like Intel's current board, just selling my shares is far, far simpler than exercising any sort of meaningful active governance. |
Which puts the onus of proof on the minority shareholders, to demonstrate they have a bonafide need for such information.
Most US states do so, which ironically makes the US one of the most authoritarian and dictatorial countries when it comes to minority shareholder rights.
Compare it with say Japan or China where the onus of proof is on the company to demonstrate why the requests of minority shareholders should be denied.
And the only real restriction is that any group of shareholders making such requests have to own at least 3% to 5% of the total shares.