Minority Control: An Analysis of British Companies using Voting Power Indices

An exercise in the empirical use of voting power indices from cooperative game theory applied to ownership data for large companies, this paper contributes in two areas : (1) the analysis of company control based on shareholder voting power, and (2) the empirical use of power indices and understanding of the comparative properties of different indices. New algorithms for calculating power indices, which quantify voting power in weighted voting bodies like company meetings, are applied to detailed data on beneficial ownership of 444 large UK companies without majority control. The results show that the Banzhaf index is, and the Shapley-Shubik index is not, useful for this analysis and a control classification of the firms is obtained.