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Full-Text Articles in Law
The Mythical Benefits Of Shareholder Control, Lynn A. Stout
The Mythical Benefits Of Shareholder Control, Lynn A. Stout
Lynn A. Stout
In "The Myth of the Shareholder Franchise," Professor Lucian Bebchuk elegantly argues that the notion that shareholders in public corporations have the power to remove directors is a myth. Although a director facing a proxy contest might find this to be a bit of an overstatement, the core idea is sound. In a public company with widely dispersed share ownership, it is difficult and expensive for shareholders to overcome obstacles to collective action and wage a proxy battle to oust an incumbent board. Nor is success likely when directors can use corporate funds to solicit proxies to stay in place. …
Fiduciary Duties For Activist Shareholders, Iman Anabtawi, Lynn Stout
Fiduciary Duties For Activist Shareholders, Iman Anabtawi, Lynn Stout
Lynn A. Stout
Corporate law and scholarship generally assume that professional managers control public corporations, while shareholders play only a weak and passive role. As a result, corporate officers and directors are understood to be subject to extensive fiduciary duties, while shareholders traditionally have been thought to have far more limited obligations. Outside the contexts of controlling shareholders and closely held firms, many experts argue shareholders have no duties at all. The most important trend in corporate governance today, however, is the move toward "shareholder democracy." Changes in financial markets, in business practice, and in corporate law have given minority shareholders in public …