A government acquires a 20% stake in a tech company deemed strategic. The press release speaks of anchoring, regained sovereignty, and control. The media picks up on the figure. And no one reads the articles of incorporation. Yet it is there—and nowhere else—that the answer to the only question that matters lies: Does this stake grant the right to make decisions, or merely the right to collect dividends?
Corporate law has long settled this issue. The debate over digital sovereignty, however, continues to confuse the percentage of equity with actual power. Let’s clarify the difference.
Owning shares does not mean making decisions
A share confers two distinct rights: a financial right—to receive a share of the profits—and a political right—to vote at shareholders’ meetings. It is assumed that these go hand in hand, proportional to one’s share of the capital. They are not always proportional, and even when they are, a vote alone is not enough to make decisions.
Holding 20% of the capital means, at best, having 20% of the votes at the general meeting. However, the general meeting does not manage the company on a day-to-day basis. It appoints directors, approves financial statements, and votes on a few major decisions. The rest—business strategy, technological choices, partnerships, and hiring—falls under the purview of the board of directors and management. A 20% shareholder who does not sit on the board has no influence over these decisions. They learn about them just like everyone else.
What matters are the thresholds. Under French law, a blocking minority at an extraordinary general meeting requires more than one-third of the votes, because decisions amending the articles of incorporation require a two-thirds majority. Below that threshold, nothing can be blocked. A 20% shareholder can neither impose nor prevent an amendment to the articles of incorporation, a merger, or a capital increase that would dilute their stake. They can ask questions, request a management audit, and make a fuss. They do not make decisions.
The Real Tools of Control
Power in a company is not measured by capital. It is found in three documents—and those alone.
First, the articles of incorporation. They can create preferred shares: double voting rights for loyal shareholders, a veto right over certain decisions, a reserved seat on the board, or the right to review the sale of assets. They can also establish a golden share—a specific share retained by the government to block a takeover or the sale of a sensitive asset, regardless of its stake in the company. A single share can then carry more weight than a 20% stake.
Next is the shareholders’ agreement. This is a private, often confidential contract that sets out what the articles of incorporation do not specify: who appoints whom to the board, which decisions require the unanimous consent of the signatories, who may sell and to whom, and who has a right of first refusal. A minority shareholder well-protected by a pact carries more weight than a majority shareholder who is excluded from it.
Finally, the capital structure. Tech giants illustrate this starkly. Alphabet, Meta, and many others operate with two classes of stock. Common shares, which are publicly traded, carry one vote each. Founders’ shares carry ten votes each. The result: a founder can hold 13% of the equity and control more than half the votes. Anyone who buys the publicly traded shares is financing the company. They do not run it, and this mechanism is spelled out in black and white in the articles of incorporation they accepted upon purchase.
Why a Minority Public Stake Is Not Enough
This reasoning applies equally to a government as it does to a fund. Acquiring a stake in a tech company does not confer any operational power simply by virtue of the size of the stake. Without a seat on the board accompanied by real voting rights, without a veto enshrined in the articles of incorporation, and without a covenant that locks down sensitive decisions, a minority public stake remains merely an investment. Public money buys a dividend and a press release, not decision-making power.
Worse still, a poorly protected minority shareholder is vulnerable. A capital increase in which they do not participate dilutes their stake. A change in share class marginalizes them. A shareholder agreement they did not negotiate leaves the real levers of control in the hands of others. We have seen governments acquire stakes in strategic companies only to discover, at the first sign of conflict, that they had no legal leverage to influence a decision that was nonetheless vital. The government’s stake was merely nominal. The real power lay in an agreement they had not signed.
This is the same misinterpretation as believing that a server in France is enough to make a service sovereign. People confuse a visible attribute—such as location or percentage—with actual ownership, applicable law, or the right to make decisions.
What a Leader Needs to Know
Before celebrating an equity investment or a partnership, a leader doesn’t need to become a business lawyer. They need to understand four key points and request the documents that support them.
Who sits on the board, and with what voting rights. A seat without voting rights is a token position. Which decisions require a qualified majority or a veto, and who holds that power. That is where the real points of control lie. What the shareholders’ agreement stipulates regarding sales, dilution, and exits. A minority shareholder without an anti-dilution clause will see their stake evaporate at the first funding round. And finally, what class of shares one actually holds, and how many votes each share carries.
The percentage of equity is the figure that’s disclosed. Governance rights are the factor that matters. As long as we’re talking about percentages, we’re talking about perspective. The day we start talking about seats, thresholds, and vetoes, we’re finally talking about power.
Sources
- French Commercial Code, provisions on general meetings, majorities, and preferred shares (Articles L. 225-96 et seq.), legifrance.gouv.fr
- AMF, recommendations on shareholder agreements and control of listed companies
- Alphabet Inc., dual-class share structure (Class A, Class B, Class C), Form 10-K, sec.gov
- Meta Platforms Inc., dual-class structure and distribution of voting rights, proxy statement, sec.gov
- European Commission, case law on golden shares and the free movement of capital