Control

Definition - What does Control mean?

Control is largely associated with power and having the power to influence people, decisions or processes. In a business setting, control is generally used as a way of ensuring that an organization's processes are achieving its goals.

Divestopedia explains Control

Control is quite frequently held by those in management, with higher levels of management generally wielding a higher level of control over those beneath them. Corporate control refers to a management group that has the authority to make decisions regarding several financial aspects of a business. Some organizations do, however, implement a higher level of autonomy for their employees, which spreads more control to the lower levels of the organization.

Control is most commonly measured by 51% of the voting shares owned by one shareholder or a group of shareholders acting together. In a private equity transaction, PE will look for methods to control their investment through majority share ownership (> 51%) or other means including majority board representation, governance and liquidity provisions, investment in preferential share classes and rights in shareholder agreements.

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