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Full-Text Articles in Law

The Future Of Shareholder Democracy, Lisa M. Fairfax Oct 2009

The Future Of Shareholder Democracy, Lisa M. Fairfax

Indiana Law Journal

In 2007, the Securities and Exchange Commission (SEC) considered, and ultimately rejected, a rule that would have required corporations to include shareholder-nominated candidates on the ballot. This Article seeks to ascertain the impact of this rejection. On the one hand, the SEC's rejection appears to be a stunning blow to the shareholders' rights campaign. This is because many shareholders' rights advocates have long considered access to the corporate ballot as the "holy grail" of their campaign for increased shareholder power. Such advocates believe that access to the corporate ballot is critical to ensuring that shareholders can participate legitimately in ...


The Legitimate Rights Of Public Shareholders, Lawrence E. Mitchell Sep 2009

The Legitimate Rights Of Public Shareholders, Lawrence E. Mitchell

Washington and Lee Law Review

In recent years there has been significant ongoing academic debate over the expansion ofpublic shareholders 'participation rights in corporate governance. The debate has accompanied a dramatic increase in institutional shareholder and hedge fund activism attempting to influence the conduct ofcorporate affairs. The legitimacy ofshareholderp articipationr ights depends upon the actual role public shareholders play in contributing to the corporation's function of providing goods and services and, ultimately, to economic growth and social welfare. Few in the debate have stopped to examine this question. This Article presents original empirical evidence that demonstrates that public shareholders do not, on net, contributec ...


Has Corporate Law Failed? Addressing Proposals For Reform, Antony Page Apr 2009

Has Corporate Law Failed? Addressing Proposals For Reform, Antony Page

Michigan Law Review

Part I of this Review discusses the modem "nexus of contracts" approach to corporations and highlights how Greenfield's views differ. Part II examines corporate goals and purposes, suggesting that Greenfield overstates the impact of the shareholder-primacy norm and does not offer a preferable alternative. Part III critiques the means to the ends--Greenfield's proposals for changing the mechanics of corporate governance. Although several of his proposals are intriguing, they seem unlikely to achieve their pro-social aims. This Review remains skeptical, in part because-even given its problems-the U.S. "director-centric governance structure has created the most successful economy the world ...


Administrative Governance As Corporate Governance: A Partial Explanation For The Growth Of China's Stock Markets, David A. Caragliano Jan 2009

Administrative Governance As Corporate Governance: A Partial Explanation For The Growth Of China's Stock Markets, David A. Caragliano

Michigan Journal of International Law

This Note argues that during the first decade of stock market development (roughly 1990-2000) Chinese institutions, which emphasized administrative direction and control, functioned in lieu of legal and financial institutions. Preexisting modes of administrative governance introduced incentives that mitigated information asymmetry problems inherent in initial public offerings (IPOs) and contributed to enhanced market valuation during the post-IPO phase. The author focuses on two sui generis Chinese institutions employed during this time period: the quota system for equity share issuance and the Special Treatment (ST) system for underperforming issuers. In short, the thesis is that administrative governance substituted for corporate governance.


Undressing The Ceo: Disclosing Private, Material Matters Of Public Company Executives, Tom C.W. Lin Jan 2009

Undressing The Ceo: Disclosing Private, Material Matters Of Public Company Executives, Tom C.W. Lin

UF Law Faculty Publications

Disclosing material private matters of public company executives is a difficult and complex but sometimes necessary act. Advocates that favor more disclosure and advocates that favor more privacy both have many legitimate arguments and concerns. This article argues that when viewed in the context of contemporary capital markets, the enhanced role of the executive, and the modern media, additional disclosure from executives about material, private matters is desirable. In support of this argument, this article proposes a principle-based approach for executive disclosure that affords companies and executives reasonable deference on what to disclose and how to disclose it, while simultaneously ...


Arrow's Theorem And The Exclusive Shareholder Franchise, Grant M. Hayden, Matthew T. Bodie Jan 2009

Arrow's Theorem And The Exclusive Shareholder Franchise, Grant M. Hayden, Matthew T. Bodie

All Faculty Scholarship

In this essay, we contest one of the main arguments for restricting corporate board voting to shareholders. In justifying the limitation of the franchise to shareholders, scholars have repeatedly turned to social choice theory—specifically, Arrow’s theorem—to justify the exclusive shareholder franchise. Citing to the theorem, corporate law commentators have argued that lumping different groups of stakeholders together into the electorate would result in a lack of consensus and, ultimately, the lack of coherence that attends intransitive social choices, perhaps even leading the corporation to self-destruct. We contend that this argument is misguided. First, we argue that scholars ...


Monitoring Of Corporate Groups By Independent Directors, Adam C. Pritchard Jan 2009

Monitoring Of Corporate Groups By Independent Directors, Adam C. Pritchard

Articles

Both the United States and Korea have reformed their corporate governance in recent years to put increasing responsibilities on independent directors. Independent directors have been found to be an important force protecting the interests of shareholders when it comes time to make certain highly salient decisions, such as firing a CEO or selling the company. This article compares the role of independent directors in the US and Korean systems. I argue that the US may have placed regulatory burdens on independent directors that they are unlikely to be able to satisfy, given their part-time status. By contrast, in the chaebol ...