Listen to this article:

The Reserve Bank’s insistence that Tata Sons list is not only an Indian question. Charitable foundations own some of the finest companies on earth, and no government has yet told one of them to sell.

Illustration: Pariplab Chakraborty.

Companies controlled by charitable foundations account for roughly 60% of the market capitalisation of the Copenhagen Stock Exchange. Some estimates put it nearer 68%. Industrial foundations control a quarter of Denmark’s hundred largest corporations. There are around 1,300 of them, accounting for as much as a fifth of the country’s international business.

These are not obscure firms. A.P. Møller-Maersk, the world’s largest container shipping company. Carlsberg. Novo Nordisk, whose foundation is now the largest philanthropic body on earth with assets above €100 billion, having overtaken the Gates Foundation. Unlike most foundations it is not spending down a donated pool. It draws dividends from a working pharmaceutical business that produces fresh profit every quarter.

Widen the lens and the roll call grows: Robert Bosch, Bertelsmann and Carl Zeiss in Germany; Rolex in Switzerland, wholly owned by the Hans Wilsdorf Foundation; IKEA; CaixaBank in Spain; the Guardian in Britain, held by the Scott Trust; Hershey in the United States, controlled by a trust that funds a school for disadvantaged children.

And on that list, in the academic literature on the subject, sits Tata.

For three decades the Center for Corporate Governance at Copenhagen Business School has examined this form of ownership. Steen Thomsen and his colleagues call them enterprise foundations: foundations holding at least 20 per cent of the voting rights in a company, governed by a board according to a charter and purpose fixed by the founder, supervised by a foundation authority, created by donation.

Standard economics predicted these companies would fail. A foundation cannot be taken over. It has no members, no owners, and cannot be dissolved. Nobody watches........

© The Wire