The Case for Increasing Shareholder Power

摘要: TABLE OF CONTENTS I. INTRODUCTION: RECONSIDERING THE ALLOCATION POWER BETWEEN MANAGEMENT AND SHAREHOLDERS II. EXISTING A. U.S. Law 1. Rules-of-the-Game Decisions 2. Specific Business B. The Different Approach of the United Kingdom III. LETTING SET RULES Limits Shareholder Power To Replace Directors Some Empirical Evidence Why Is Insufficient Shareholders' Veto over Fundamental Changes Cases in Which Management Prefers Status Quo Both and Shareholders Prefer Change 3. Bundling a with Something Else C. Benefits Letting Set Rules Corporate Charters Reincorporation State One Rule Improve All Governance Arrangements D. Design Submission Proposals Adoption Proposed Regime IV. OBJECTIONS TO Rare Shareholder-Initiated Will Have Incentives Bring Proposals? Vote Against Management? It's Indirect Benefits, Stupid Costs Contests Nuisance Make Wrong Imperfect Information Consistency Argument Back-Seat Driving Special Interests Short-Term Horizons Opportunistic E. Disruptive Cycles F. Panglossian Claims G. Comparison to Political Referenda V. GAME-ENDING, SCALING-DOWN, OTHER SPECIFIC BUSINESS DECISIONS Leaving Choice Whether Management's Informational Advantage Let Decide Game-Ending Intervention Addressing Managerial Bias Toward Retaining Control Scaling-Down Empire-Building Free-Cash-Flow Problems VI. INSULATION STAKEHOLDER INTERESTS Puzzling Scope Stakeholder Claim Do Weak Benefit Stakeholders? Protection Clothes VII. CONCLUSION This Article reconsiders basic allocation power between boards shareholders publicly traded companies dispersed ownership. corporate law has long precluded from initiating any changes company's governance arrangements. Professor Bebchuk's analysis his empirical evidence indicate that shareholders' existing replace directors is insufficient secure adoption value-increasing arrangements management disfavors. He puts forward an alternative regime would allow initiate adopt rules-of-the-game decisions change charter or state incorporation. Providing such operate time improve all Furthermore, Bebchuk argues that, as part their amend arrangements, should be able provisions give them subsequently specified intervene additional decisions. game-ending (to merge, sell assets, dissolve) could address management's bias favor continued existence. scaling-down make cash in-kind distributions) tendency retain excessive funds engage empire-building. …