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Full-Text Articles in Law

Contractarian Theory And Unilateral Bylaw Amendments, Albert H. Choi, Geeyoung Min Jan 2018

Contractarian Theory And Unilateral Bylaw Amendments, Albert H. Choi, Geeyoung Min

Ira M. Millstein Center for Global Markets and Corporate Ownership

Corporate directors have been utilizing a potent mechanism in dealing with shareholder activism and shareholder litigation: the right to unilaterally amend corporate bylaws. Directors have exercised this right, for instance, to impose various requirements on who can nominate a director or call a special shareholder meeting, or to designate an exclusive forum where the shareholders can bring suit. Based on the theory that corporate charters and bylaws constitute a “contract” between the shareholders and the corporation, courts have blessed many of the bylaws that directors have unilaterally adopted. This Article examines the contractarian theory by drawing a parallel between amending …


Shareholder Voting And The Symbolic Politics Of Corporation As Contract, Grant M. Hayden, Matthew T. Bodie Jan 2018

Shareholder Voting And The Symbolic Politics Of Corporation As Contract, Grant M. Hayden, Matthew T. Bodie

Faculty Journal Articles and Book Chapters

American corporations are structured in such a way that shareholders, and shareholders alone, have the right to vote in all significant corporate decisions. Over the years, this exclusive shareholder franchise has been supported by an ongoing procession of justifications. But as those arguments have fallen by the wayside, shareholder primacists have circled back and latched upon a final argument for the special voting status of shareholders, arguing that this fundamental feature of corporate governance is the product of the set of freely-bargained-for agreements among all corporate constituents. Because this set of agreements reflects the preferences of all parties to the …


Shareholder Voting And The Symbolic Politics Of Corporation As Contract, Matthew T. Bodie, Grant M. Hayden Jan 2018

Shareholder Voting And The Symbolic Politics Of Corporation As Contract, Matthew T. Bodie, Grant M. Hayden

All Faculty Scholarship

American corporations are structured in such a way that shareholders, and shareholders alone, have the right to vote in all significant corporate decisions. Over the years, this exclusive shareholder franchise has been supported by an ongoing procession of justifications. But as those arguments have fallen by the wayside, shareholder primacists have circled back and latched upon a final argument for the special voting status of shareholders, arguing that this fundamental feature of corporate governance is the product of the set of freely-bargained-for agreements among all corporate constituents. Because this set of agreements reflects the preferences of all parties to the …