With Alibaba’s first annual meeting scheduled for October 8, we conducted an examination of its corporate governance structure. At the time of its IPO last year, we wrote that what the company calls its “hybrid” corporate governance structure maintains insider control not through a dual-class voting structure but through the director nomination process. Under the company’s bylaws, the Alibaba Partnership, an insider group chosen by founder Jack Ma, retains the right to elect a majority of board seats.

The company’s 2015 annual report includes the following among dozens of Risk Factors:

  • The Alibaba Partnership and related voting agreements limit the ability of our shareholders to nominate and elect directors.
  • The interests of the Alibaba Partnership may conflict with the interests of our shareholders.
  • Our articles of association contain anti-takeover provisions that could adversely affect the rights of holders of our ordinary shares and ADSs.

We are not aware of another corporation that lists its corporate governance structure as a risk to shareholders. In fact, numerous concerns about the company’s corporate governance have been widely cited:

  • The board is majority non-independent;
  • The board is classified;
  • The company lacks independent audit or compensation committees;
  • The company provides little information about executive compensation;
  • The company has only one woman on its board;
  • The company discloses little about sustainability, and lacks robust sustainability oversight at the board or management level.


Access the full report here.


John K.S. Wilson is the Head of Corporate Governance, Engagement & Research at Cornerstone Capital Group.  John has over 17 years of experience in socially responsible investing and corporate governance.