[PDF] A Theory Of Shareholder Activism And Its Place In Corporate Law eBook

Author : Bernard S. Sharfman
Publisher :
Page : 42 pages
File Size : 23,91 MB
Release : 2017
Category :
ISBN :

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Offensive shareholder activism (more commonly known as hedge fund activism) can be understood as a corrective mechanism in the governance of a public company. The legitimacy of offensive shareholder activism as a corrective mechanism is based on numerous empirical studies that have found this type of activism to be both wealth enhancing for shareholders and performance enhancing for the target companies. A non-empirical argument can also be made in support of offensive shareholder activism that focuses on the ability of the board of directors to act as impartial arbitrator deciding between the advices provided by executive management and the activist hedge fund. Recognizing the value of offensive shareholder activism in the decision making of a public company allows for the following theory of shareholder activism: Shareholder activism is a valuable asset in and of itself if the purpose of such activism is to correct managerial inefficiencies. This new theory is built on the foundation of Henry Manne's market for corporate control.The implications for corporate law are significant. If corporate law does not recognize offensive shareholder activism as a corrective mechanism, then the benefits of such activism in terms of enhancing the managerial efficiency of public companies and increasing shareholder wealth may become significantly reduced. To facilitate this recognition, this Article provides new thinking on how Delaware's Unocal test and Blasius standard of review should be applied by the Courts when the Board takes action to minimize the influence of activist hedge funds. Under both standards of review it is argued that corporate law should always take a skeptical view of any Board action taken to directly or indirectly mitigate the influence of this type of activism. This approach is not about shifting decision making authority from the Board to activist hedge funds, but simply putting limits on the Board's ability to use the legal system to thwart the influence of hedge fund activism in a public company's decision making process.

Author : Iris H-Y Chiu
Publisher : Bloomsbury Publishing
Page : 204 pages
File Size : 33,77 MB
Release : 2010-10-12
Category : Law
ISBN : 1847316042

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The Foundations and Anatomy of Shareholder Activism examines the landscape of contemporary shareholder activism in the UK. The book focuses on minority shareholder activism in publicly listed companies. It argues that contemporary shareholder activism in the UK is dominated by two groups; one, the institutional shareholders whose shareholder activism is largely seen as a driving force for good corporate governance, and two, the hedge funds whose shareholder activism is based on value extraction and exit. The book provides a detailed examination of both types of shareholder activism, and discusses critically the nature of, motivations for and consequences following both types of shareholder activism. The book then locates both types of shareholder activism in the theory of the company and the fabric of company law, and argues that institutional shareholder activism based on exercising a voice at general meetings is well supported in theory and law. The call for institutions to engage in more informal forms of activism in the name of 'stewardship' may bring about challenges to the current patterns of activism that institutions engage in. The book argues, however, that a more cautious view of hedge fund activism and the pattern of value extraction and exit should be taken. More empirical evidence is likely to be necessary, however, to weigh up the long terms benefits and costs of hedge fund activism.

Author : Alon Brav
Publisher : Now Publishers Inc
Page : 76 pages
File Size : 41,40 MB
Release : 2010
Category : Business & Economics
ISBN : 1601983387

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Hedge Fund Activism begins with a brief outline of the research literature and describes datasets on hedge fund activism.

Author : Ekrem Solak
Publisher : Routledge
Page : 237 pages
File Size : 15,27 MB
Release : 2020-05-04
Category : Law
ISBN : 1000069745

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This book provides a complete framework for contemporary shareholder activism and its implications for US corporate governance, which is based on director primacy theory. Under director primacy theory, shareholders do not wish to be involved in the management of the company; in the rare event that they wish to be involved, it is considered a transfer of power from the board of directors to shareholders, which in turn reduces the efficiency of 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 that some form of shareholder activism is even collaborative, which is a new paradigm for US corporate governance. This book shows that while monitoring remains a key contribution of shareholders, they also bring new informational inputs to corporate decision-making that 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's authority. Therefore, this book argues 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 field 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.

Author : Jeffrey Neil Gordon
Publisher : Oxford University Press
Page : 1217 pages
File Size : 43,29 MB
Release : 2018
Category : Business & Economics
ISBN : 0198743688

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Corporate law and governance are at the forefront of regulatory activities worldwide, and subject to increasing public attention in the wake of the Global Financial Crisis. Comprehensively referencing the key debates, the Handbook provides a much-needed framework for understanding the aims and methods of legal research in the field.

Author : Jay W. Eisenhofer
Publisher : Wolters Kluwer
Page : 1458 pages
File Size : 18,37 MB
Release : 2005-01-01
Category : Business & Economics
ISBN : 0735557004

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Shareholder Activism Handbook is the single most comprehensive guide on all matters relating to enforcing shareholders' rights. As shareholder activism becomes a more integral part of investing, the law continues to respond accordingly. Legislators

Author : Jennifer G. Hill
Publisher : Edward Elgar Publishing
Page : 638 pages
File Size : 38,24 MB
Release : 2015-07-31
Category : Law
ISBN : 1782546855

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Much of the history of corporate law has concerned itself not with shareholder power, but rather with its absence. Recent shifts in capital market structure require a reassessment of the role and power of shareholders. These original, specially commiss

Author : Barnali Choudhury
Publisher : Cambridge University Press
Page : 351 pages
File Size : 25,15 MB
Release : 2017-07-20
Category : Law
ISBN : 1108210945

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What is the purpose of the company and its role in society? From their origin in medieval times to their modern incarnation as powerful transnational bodies, companies remain an important part of business and society at large. Drawing from a variety of perspectives, this book adopts a normative approach to understanding the modern company and provides insights into how companies should be conceptualized. It considers key topics such as the development of corporate theory, the rights and obligations of the company, and the means and ends of corporate governance. Written by leading experts of different jurisdictions, this book provides important international viewpoints on some of the most pressing corporate governance questions.

Author : Anita Indira Anand
Publisher : Oxford University Press
Page : 187 pages
File Size : 17,12 MB
Release : 2020-02-01
Category : Law
ISBN : 0190096551

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How effectively can governing mechanisms forged before the surge of activist investment continue to protect shareholders and efficiently order capital markets? This is a pressing question for scholars and practitioners of corporate law, as well as for market participants generally. In order to illuminate the extent to which the growing trend of shareholder activism calls for a new understanding of the kind of shareholder-corporate relations the law should facilitate, this book introduces the concept of shareholder-driven corporate governance. This concept refers to the evident phenomenon of shareholder involvement in corporate governance and offers a normative endorsement of this development. In order to secure the benefits of investors' increasing involvement in corporate affairs, regulatory regimes must grapple with a number of considerations. This book is based on the idea that shareholder corporate governance is a welcome development, but that it does not come without regulatory challenges. For one, it requires rejecting the idea that well-ordered capital markets can be achieved through corporate law which is subservient to private ordering. The mandatory character of, for example, securities regulation is vital to fostering shareholder involvement in corporate affairs. Defenders of shareholder corporate governance must also confront the matter of "wolf packs," or loosely formed bands of investors who defy existing regulatory categories but nonetheless exert collective influence. Regulation that is sensitive to both the inadequacies of past approaches to corporate-shareholder relations and the novel challenges posed by increasing shareholder activism will be able to harness activism, allowing capital markets to flourish.

Author : Michael J. Rubach
Publisher : Taylor & Francis
Page : 202 pages
File Size : 27,39 MB
Release : 1999
Category : Business & Economics
ISBN : 9780815335023

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First Published in 2000. Routledge is an imprint of Taylor & Francis, an informa company.