Under the rules of major US stock exchanges, a controlled company is one where more than 50 percent of the voting power for the election of directors is held by an individual, a group or another company. A founder with high-vote shares or a parent company that owns most of a subsidiary are typical examples.
Such companies may be exempt from some of the governance requirements that apply to others. These can include having a majority of independent directors and having fully independent compensation and nominating committees. The reasoning is that the controlling holder can elect the board anyway, so the rules designed to protect against management control add little.
The company must disclose that it is a controlled company and whether it uses the exemptions. For minority investors, the downside is limited influence, because a controlling holder can decide most matters, and conflicts of interest are possible.
Read the risk factor and governance sections, and see who holds the control and how it could change.