Control in Pyramidal Structures


Université Libre de Bruxelles, Solvay Brussels School of Economics and Management – Centre Emile Bernheim, Av. F.D. Roosevelt, 50, CP 145/1, 1050 Brussels, Belgium. Tel: 0032-2-650-38-92; E-mail:


Manuscript Type: Conceptual.

Research Question/Issue: Shareholding structures are sometimes so complex that it can be difficult to know who are the actual owners and controllers of a firm. In particular, in continental Europe and Asia, control tunnelling appears frequently through pyramidal structures. Different methods exist to isolate control from ownership. This paper attempts to better understand these different models and their implications.

Research Findings/Results: After describing ownership structure through a graph association, this paper analyzes the voting game at stake in the race for control. It compares existing methods and algorithms to identify the owners and controllers of a firm in a pyramidal structure without cross-ownership. These different methods are then applied to the case of a Belgian retailer, Colruyt. The results are compared and the influence of a control threshold is analyzed. Furthermore, it shows how the ownership structure allows the Colruyt family to maintain control of the firm even if there is dissension within the family.

Theoretical Implications: This study clarifies definitions of ownership structures and provides a better understanding of models that analyze ownership structure and their implications.

Practical Implications: In practice, these models can help shareholders achieve a majority of voting rights in the general assembly by identifying who are the influential partners. Furthermore, the models provide a means for external parties to determine whether control of a firm is attainable, and if so, how. Established shareholders may also use these models to ascertain the optimal ownership structure that will preserve their control with a minimum level of investment.