de facto control

Meaning

Control or authority that exists in reality and practice, even if it is not officially or legally recognized by formal documents or titles. In corporate governance, a shareholder with less than 50% of shares might exercise de facto control if the remaining shares are highly dispersed.

Examples

• Although he holds no official executive title, the founder retains de facto control over all major product decisions.

  Although he holds no official executive title, the founder retains de facto control over all major product decisions.

• By holding a 40% stake and securing key board seats, the parent company exercised de facto control over the subsidiary.

  By holding a 40% stake and securing key board seats, the parent company exercised de facto control over the subsidiary.

• Regulatory bodies look past legal structures to determine who has de facto control of the financial institution.

  Regulatory bodies look past legal structures to determine who has de facto control of the financial institution.

• The sudden departure of the CEO left the chief operating officer in de facto control of daily operations.

  The sudden departure of the CEO left the chief operating officer in de facto control of daily operations.

• Even without a majority vote, their strategic alliances allowed them to maintain de facto control of the consortium.

  Even without a majority vote, their strategic alliances allowed them to maintain de facto control of the consortium.

Common Mistakes

• ✗ According to the contract, they have de facto control of the company.

  ✓ According to the contract, they have de jure control, but the founder still exercises de facto control.

  If control is established by contract or law, it is 'de jure' (by law), whereas 'de facto' means control that exists in practice regardless of the law/contract.

• ✗ The manager has a de facto control over the team.

  ✓ The manager has de facto control over the team.

  'De facto control' is typically used without an article ('a') when acting as a non-count noun phrase.

Related Expressions

Practice

• Even though she only owns 35% of the shares, her influence over the board gives her ___ of the corporation.

  💡 Control in reality, if not by absolute legal majority.

  Show answer

  de facto control

• The court ruled that the parent company had ___ over the bankrupt subsidiary's daily management.

  💡 Practical, hands-on control.

  Show answer

  de facto control