Corporate Executive Power: Who Runs the Show?
In theory, corporations are owned and governed by shareholders. Large and small investors provide the capital and are supposed to hold ultimate authority. The executives—CEOs, CFOs, and their fellow top managers—are meant to act as stewards, serving the shareholders’ interests.
But in practice, that’s not what’s happening. In today’s corporate world, executive power has quietly and steadily dominated decision-making, reward systems, and governance structures. It’s now fair to ask: Are executives still serving shareholders, or are they mainly serving themselves?
Let’s unpack this question.
The Passive Shareholder Problem
Shareholders are technically the owners of a corporation. But most of them don’t act like it.
Why? Because they are often individuals investing through pension funds or index-tracking products. They don’t attend annual meetings, they rarely vote directly, and they usually don’t have a clear picture of what’s happening inside the company. As long as their investment increases in value, they tend to stay silent.
This passivity gives corporate executives more room to operate without meaningful oversight. As long as they keep the share price stable—or appear to—they are free to make the big calls.
Corporate Executive Power in Action
Executives have accumulated a toolkit of ways to entrench their authority and reward themselves in the process:
- Bonuses and stock options: These are often tied to short-term targets which can be carefully managed or manipulated. Meanwhile, the long-term health of the company may be ignored.
- Golden parachutes: When executives leave, even after poor performance, they often walk away with multi-million-euro exit packages. It’s a curious kind of accountability.
- Control over board appointments: The board of directors is supposed to provide checks and balances. But in many cases, it’s the executives who recommend candidates to shareholders. The result? Boards that are more loyal to the CEO than to the investors.
This is the heart of the issue. Corporate executive power doesn’t just come from being at the top of the organisational chart. It’s reinforced through a system designed to protect insiders and discourage challenge.
Boards: Watchdogs or Lapdogs?
Many corporate boards today lack the independence or insight to truly oversee senior management. Board members may sit on several boards at once, making them career directors rather than watchdogs of a single firm. They are often far removed from the day-to-day realities of the business and rely heavily on what executives tell them.
And because shareholders are usually given a list of pre-approved candidates—often proposed by the same executives being overseen—they rarely push back. Many don’t even know they can push back. It’s all far too convenient for the people in power.
The Self-Protection Machine
To shield themselves from criticism and reform, executives invest in more than bonuses. They also shape the system around them.
- Lobbying: Corporations spend vast sums influencing employment laws, tax rules, and regulations—all with an eye to protecting their status and perks.
- HR and DEI frameworks: While often presented as moral or progressive initiatives, some of these programmes can also serve as strategic defences. By centralising power within HR departments and creating complex internal policies, executives can insulate themselves from criticism under the banner of compliance or social responsibility.
This isn’t to say all such policies are insincere. But it’s worth asking: are they always about doing the right thing? Or are they sometimes about keeping power and dissent under control?
When Corporations Grow Too Big to Question
As corporations grow, so too does the corporate executive power within them. Large organisations become less transparent. Layers of management multiply. Bureaucracy expands. At some point, it becomes impossible for shareholders—or even boards—to understand what’s going on at the top.
This vast scale benefits executives more than anyone else. They can point to the sheer complexity of the business as justification for their authority, their pay, and their freedom from interference.
And while executive compensation soars, average worker wages often stagnate. The result is a corporate structure where wealth and decision-making are concentrated in a very small circle.
Is Breaking Up Corporations the Answer?
So, what’s the solution?
One idea gaining traction is the breaking up of large corporations. The logic is simple: smaller companies are easier to manage, easier to understand, and easier to hold accountable. When companies grow too big, they stop serving the public interest and start serving the interests of the few at the top.
Breaking them up isn’t about punishment—it’s about restoring competition, responsibility, and balance. It’s about giving shareholders and workers a fairer shot at influencing how things are run.
This isn’t a radical or new idea. Governments have done it before when monopolies threatened markets and democracy. Maybe it’s time to look at it again.
Final Thoughts: Time to Rebalance
The modern corporate world is built on the assumption that executives act on behalf of shareholders. But today’s reality tells a different story. Corporate executive power has become a force unto itself—self-serving, self-protecting, and largely unchallenged.
If shareholders remain passive, and if boards remain loyal to those they should be monitoring, there is little hope for change from within. The balance of power has shifted too far.
So perhaps we need to start asking uncomfortable questions:
- Who is really in charge?
- Who gets to decide what is “good” for the company?
- And who is brave enough to push back?
Until those questions are answered, don’t expect much to change—except, perhaps, the size of the bonuses.
