Shareholder Activism and the Law: The Future of US Corporate Governance, 1st Edition (Hardback) book cover

Shareholder Activism and the Law

The Future of US Corporate Governance, 1st Edition

By Ekrem Solak

Routledge

232 pages

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Hardback: 9780367344634
pub: 2020-05-28
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Description

This book provides a complete framework for contemporary shareholder activism and its implications over US corporate governance, which is based on the director primacy theory.

Under director primacy theory, shareholders do not wish to be involved with the management, and when they do it equally means a transfer of power from the board of directors to shareholders, which in turn reduces the efficiency of the centralised decision-making in public-companies. However, this book demonstrates that shareholders do not use their power to transfer corporate control from the board to themselves, and even some form of shareholder activism is collaborative, which is a new paradigm for US corporate governance. This book shows that while monitoring remains as a key contribution of shareholders, they also bring new informational inputs to corporate decision-making, which could not be obtained under the traditional board model. Accordingly, contemporary shareholder activism enhances the board’s decision-making and monitoring capacity, without undermining the economic value of the board authority. Therefore, this book sets out that the complete approach of contemporary shareholder activism should be accommodated into US corporate governance. In doing so, this book considers not only legal and regulatory developments in the wake of the 2007-2008 financial crisis, but also the governance developments through by-law amendments. Furthermore, the author makes several recommendations to soften the current director primacy model: establishing a level playing for private ordering, adopting the proxy access default regime, the majority voting rule, the universal proxy rules, and enhancing the disclosure requirements of shareholders.

The book will be of interest to academics and students of corporate governance, both in the US and internationally.

Table of Contents

Acknowledgments

abstract

Chapter 1. Introduction

Chapter 2. Corporate Governance: Framework and Control Mechanisms

Chapter 3. Theoretical Aspects of Shareholder Activism

Chapter 4. The Landscape of Institutional Shareholders

Chapter 5. Shareholder Activism in US Corporate Governance

Chapter 6. Accommodating Shareholder Activism in the US System of Corporate Governance

Chapter 7. Conclusion

Bibliography

 

table of cases

 

About the Author

Ekrem Solak is a Lecturer in the Department of Corporate and Commercial Law, at İstanbul Medeniyet University, School of Law. He earned his Bachelor of Laws from Yeditepe Law School. He holds a LLM in Corporate and Commercial Law from Queen Mary, University of Law. He completed his PhD at the University of Edinburgh in 2018. His thesis entitled “The Evolving Role of Shareholders and the Future of Director Primacy Theory”. His research interests include company law, commercial law, capital market law, and international commercial law.

About the Series

Routledge Research in Corporate Law

The credit crunch of 2007 and the ensuing financial crises have led to a renewed interest in the place of corporations in the modern world and the role of law and regulation in governing their behaviour. This series looks to survey the current developments within the field of corporate law as well as mapping out future opportunities for change. The series offers a comparative approach to the subject, looking not just at North America and Europe but also at the state of affairs elsewhere in the world. Written by influential scholars, the books offer thought-provoking and often critical analyses of corporate law. The functions and legal obligations and rights of multiple stakeholders including directors, investors, governments and regulators are examined from both empirical and theoretical standpoints. Whilst being grounded in law the series also draws upon research from the disciplines of economics, management studies, sociology and politics in order to explore the implications of corporate law in their wider social and economic context.

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Subject Categories

BISAC Subject Codes/Headings:
LAW000000
LAW / General
LAW022000
LAW / Corporate