After Shareholder Democracy: Where Accountability Goes Next

Last week our colleague argued that the SpaceX IPO may signal a turning point for shareholder democracy. Dual-class structures have hardened into permanent, founder-controlled fortresses. A market that oversubscribed the offering fourfold, clears the way for whatever governance terms founders choose. We reflect on Frances Haugen’s warning: there is no one holding these founders accountable but themselves.  As with Mark Zuckerberg, Elon Musk has little but his own perspective to hold him accountable:  This brings us to the question:

If shareholder voice no longer matters, what does?

Founder centered structures, like those of Meta, SpaceX and Alphabet allow for an accumulation of personal wealth and power that reaches far beyond company balance sheets. In protecting the vision of the founders, individual shareholders have handed over more than their investment dollars.  The wealth and power of a few in the corporate world is shaping some of the largest challenges of our time.

For decades, the frameworks that guided responsible investing and shareholder engagement rested on assumptions so foundational we rarely named them: , inflation was manageable and mean-reverting, , and the line between commerce and conflict was clear. None of those assumptions hold today. We are living through what economists call a polycrisis, a convergence of stresses that amplify one another rather than merely coexist. War, flaring and subsiding and flaring again, has returned as a recurring energy shock. Inflation has revealed itself to be structural, driven by deglobalization and the weaponization of supply chains. And artificial intelligence has arrived at this moment of institutional stress, accelerating change faster than any governance system can follow.

That last force is where governance and geopolitics collide. AI built for consumer productivity is being repurposed for autonomous targeting and border enforcement. License plate readers installed to deter shoplifting are being queried by immigration authorities. The same large language models powering customer-service bots are being evaluated for military logistics. The same founders who built these companies on public commitments to safety and ethics have since traded those commitments for White House access and federal contracts. These are dual-use technologies, and the companies building them increasingly sit behind governance walls that no shareholder vote can scale.

Put the two trends together and the danger is plain. The firms with the most unaccountable governance are the same firms deciding where the most powerful technologies in the world will be deployed. When founders hold permanent voting control, the ordinary mechanism for registering objection, the proxy ballot, becomes theater. We know this firsthand. NorthStar has spent eleven years filing one-share, one-vote proposals at Meta and Alphabet. Strip out insider votes and independent shareholders back us almost unanimously, most recently, 85 percent at Meta and 96 percent at Alphabet. It has changed nothing, because structurally it cannot. Founders will never vote to limit their own power.

So we have stopped treating the vote as the destination. If the ballot cannot force change at these companies, transparency still can.

Yet our answer is not reflexive divestment.

It is deeper, more persistent, and more strategically sophisticated engagement: the kind that forces disclosure, builds accountability structures, and makes the cost of misalignment visible to boards and management teams whether or not they can be outvoted.

That is why we have pressed the companies in our portfolio to evaluate whether their AI technologies align with the human rights and ethics commitments they have publicly made. It is why we have asked boards to conduct due-diligence reviews of the contracts that put their products in the hands of military and intelligence customers. And it is why we have demanded disclosure of how data gathered for ordinary commercial purposes ends up in the hands of surveillance and immigration authorities. None of these proposals needed to win to matter. Each one forced a question onto the record that management would have preferred to leave unasked.

This is what accountability looks like after shareholder democracy: not the vote we are denied, but the disclosure we can compel. The companies that will be most trusted, and most valuable, over the long term are the ones that can articulate and defend where their technology goes and what it does in the world. Transparency is not a concession. It is a competitive advantage. And as the stakes of dual-use technology rise alongside global instability, the cost of opacity rises with them.

If SpaceX taught founders that investors will hand over their voice for a share of the returns, let this be the counter-lesson: the voice that remains, the demand to know what these companies are building and for whom, is the one we intend to use.

The vote may be lost. The reckoning is not.

Disclosure:

The views and opinions expressed herein are those of the author(s) and do not necessarily represent the views and opinions of NorthStar Asset Management.  Advisory services offered through NorthStar Asset Management, Inc., a registered investment adviser. Registration does not imply any level of skill or training. This information is general in nature and is for informational and educational purposes. It is neither an offer to sell nor a solicitation of any offer to buy any securities, investment products, or investment advisory services.