By Adrian Wooldridge

The rise of the liberal order in the 19th century rested on two revolutions. The most visible unfolded in politics, where reformers checked over-mighty rulers through constitutional rules and individual rights. Yet equally consequential was the transformation of the business world, which produced public companies answerable to their shareholders rather than to the government.

That political model began to crumble with Vladimir Putin's ascent to the Russian presidency and has continued to devolve as strongmen — and strongwomen — rise around the world. But it may be the reversal of the second revolution that proves most long-lasting and history-shaping.

Public companies were once instruments of state power: governments granted organizations such as the East India Co. the twin privileges of limited liability and trading monopolies in exchange for fulfilling national purposes and paying rents to the crown. That structure was swept aside in the 1800s, when anyone could form a limited-liability company so long as they could assemble a board and a management team. Robert Lowe, chancellor of the exchequer under William Gladstone, dubbed these companies "little republics" because they simultaneously limited the power of the state and bound themselves to strict constitutional rules.

Lowe's "little republics" are now under threat from without and within. Externally, Donald Trump has asserted power over even the biggest US companies — taking stakes in some, such as Intel Corp., and instructing others, including Apple, Inc., on where to locate their supply chains.

The internal transformation has been even more far-reaching. Google's 2004 initial public offering opened a new corporate era in which the link between ownership and control was severed and constraints on founders were weakened or removed. The company that would eventually become Alphabet, Inc. adopted three share classes: A shares with one vote, B shares with 10 votes, and C shares with no votes. Today co-founders Larry Page and Sergey Brin retain more than 50% of the company's voting power despite having retired from day-to-day management and owning less than 11% of its outstanding voting stock.

Mark Zuckerberg exercises voting control over Meta Platforms, Inc. while owning about 13% of its shares — but, unlike Page and Brin, he continues to run the company as chief executive officer and chairman. Palantir Technologies, Inc. has built a particularly intricate ownership structure: its three founders, Peter Thiel, Alex Karp, and Stephen Cohen, each hold a third of a special share class whose value adjusts so that their combined voting power always equals 49.9%.

Concentrated ownership inevitably weakens the oversight that directors or shareholders can exercise, but that is only part of the problem. Successful CEOs such as Zuckerberg have their pick of compliant directors. What does "independent" mean when the controlling shareholder oversees the composition of the board?

CEOs can also raise the stakes when someone stands in their way. Elon Musk failed to take such precautions in securing control of Tesla, Inc. and in 2018 faced a shareholder revolt over his pay. The Delaware Court of Chancery sided with shareholders — so Musk simply reincorporated his company in Texas, a less shareholder-friendly jurisdiction. In November 2025, cowed shareholders handed him a pay package worth $1 trillion, explicitly designed to increase his voting power.

This cocktail of dual-class shares, subservient directors, and jurisdiction shopping has created a new type of corporation: public capital combined with private control. Many of the world's most powerful companies are no longer classic public companies in which shareholders elect a board that can replace management. They are something new — vehicles through which visionary CEOs can raise money without losing control, and opportunities for the public to bet on great men.

A recent academic study found that the share of US tech IPOs with dual-class shares rose to 50% in 2022 from 15% in 2012, and the movement is still gathering momentum. Grab Holdings Ltd. shareholders recently voted to double the voting power of Class B shares, handing co-founder Anthony Tan as much as 74.5% of voting rights (SEC filing). Cloudflare, Inc. has won approval to replace its dual-class shares with triple-class shares. And Musk has introduced a dual voting structure in SpaceX to make up for his mistake with Tesla: he controls roughly 90% of Class B shares, which carry 10 votes each, giving him more than 80% of voting power, and he obliged shareholders to waive the right to a jury trial or class-action suit. Class B shares also hold the sole power to remove Musk as chairman and CEO — meaning he cannot be ousted without his own consent.

The trend has not gone entirely unchallenged by the gatekeepers of public markets. In 2017, S&P Dow Jones Indices announced it would no longer add new dual-class companies to the S&P 500, and FTSE Russell adopted voting-rights thresholds limiting which such companies could enter its flagship indexes — though these rules do not affect companies already listed, leaving today's controlling founders largely untouched.

So what? Critics of capitalism have long complained that companies are blinded by the need to generate short-term results to satisfy the stock market. Alphabet and its ilk have found a way to raise public money while keeping the freedom to make long-term investments in risky but potentially world-transforming technologies. Investors unwilling to sacrifice corporate control have plenty of conventionally governed options. Should such corporate innovation not be celebrated rather than reviled — particularly if, as with artificial intelligence, it is driving a great technological revolution?

There are nevertheless reasons for worry. These new corporate forms exploit shareholder capitalism's legal protections while escaping its discipline. Good corporate governance is insurance against bad or rogue management, and like all insurance it only proves its worth when things go wrong. It is not enough to say that some of these strongman CEOs are doing a good job; we must consider what happens if one goes off the rails. Henry Ford nearly destroyed what was once the world's greatest car company because he refused to limit his control or listen to critics. Both Uber Technologies, Inc. and Zenefits found it harder to oust erring CEOs because of their dual-class share structures. Musk has even ensured that he can control SpaceX from beyond the grave by allowing super-voting shares to pass to his heirs.

The cost of mismanagement is not borne by companies and their investors alone. Limited liability involves a bargain between the public and the corporation: society agrees to pick up the bill for corporate failure in return for the right to invest and exercise influence over management. That gives society — through institutions such as the stock market and the Securities and Exchange Commission, not just active investors — a right to insist on corporate rules.

The biggest worry is the concentration of power in the hands of a few. The close relationship between Donald Trump and his favorite CEOs means the state can reach deep into the private sector, and vice versa. An interconnected public-and-private oligarchy, in short, now rules with ever fewer constraints.

Such an arrangement would be worrying enough in ordinary times. But it is emerging at a moment when AI is remaking the world. Fundamental change of that kind requires careful oversight from a wide range of interest groups if it is to serve the general good. Instead, thanks to a combined political and corporate revolution, it is being driven by a tiny handful of people who are answerable to nobody but themselves.

BLOOMBERG OPINION