Inbusiness andfinance, agolden share is a type ofshare of stock that lets its owner outvote all other shareholders in certain circumstances. Golden shares often belong to the government when a government-owned company is undergoing the process ofprivatization and transformation into astock-company.
This share gives the government organization, or other shareholder, the right of decisive vote in a shareholder meeting. Usually this will be implemented through clauses in a company'sarticles of association, and will be designed to prevent stake-building above a certain percentage ownership level, or to give a government, or other shareholder, veto powers over any major corporate action, such as the sale of a major asset or subsidiary or of the company as a whole.[1]
In the context of government-owned golden shares, this share is usually reserved for companies whose business is deemed to be of ongoing importance to national interests, for example for reasons of national security.[1]
The term arose in the 1980s when theBritish government retained golden shares in companies it privatised, an approach later taken in many other European countries, as well as the former Soviet Union.[citation needed] It was introduced inRussia by a Decree of thePresident of the Russian Federation (Boris Yeltsin) on November 16, 1992.[2]
As of 2014,NATS Holdings, the UK's main air navigation service provider, is an example of a company with a golden share.[3]
Thegovernment of Brazil has been holding a golden share in aircraft manufacturerEmbraer[4] to retain veto power over "strategic decisions involving military programs and any change in its controlling interest."[5][6]
The June 2025acquisition of U.S. Steel by Nippon Steel involved the use of a golden share, giving theUS federal government extensive control over the company.[7][8] In January of that year,President Joe Biden had blocked the deal, citing national security concerns.[9][10] The president of theUnited Steelworkers union called the golden share "a startling degree of personal power over a corporation".[11]
In 2013, thePeople's Republic of China introduced golden shares termed "special management shares".[12][13][14] Since then, golden shares have been utilized byChinese Communist Party (CCP)general secretaryXi Jinping'sadministration to expand control over private companies, particularly technology companies.[12][15][16] Golden shares have featured prominently in the governance of digital platforms, which accepted this arrangement in exchange for journalism licenses required for their daily operations.[14] During the2020–2021 Xi Jinping administration reform spree, the government used strategic share acquisitions to increase its golden share holdings.[17]: 275 In 2021,The Economist andReuters described theChinese government's stake inByteDance as a golden share investment.[18][19]
The British government's golden share inBAA, the UK airports authority, was ruled illegal by European courts in 2003, when it was deemed contradictory to the principle of free circulation of capital within theEuropean Union.[20] The European Court of Justice also held thatPortugal's holding of golden shares inEnergias de Portugal is contrary to European Union law since it presented an unjustified restriction on free movement of capital.[21]
Other golden shares ruled illegal include theSpanish government's golden shares inTelefónica,Repsol YPF,Endesa,Argentaria andTabacalera.
The golden share structure ofVolkswagen AG and the travails of the GermanLand (federal state) ofNiedersachsen (Lower Saxony) are discussed by Johannes Adolff[22] as well by asPeer Zumbansen and Daniel Saam.[23]
{{cite journal}}: CS1 maint: multiple names: authors list (link)State investors have also been taking "golden shares", tiny stakes that grant outsized voting powers, in China's internet giants. In October it was revealed that a government agency had taken a 1% stake in a subsidiary belonging to Tencent, China's mightiest internet titan.
