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Empowering Shareholders in Directors' Elections: A Revolution in the Making


Marco Ventoruzzo


Pennsylvania State University - Dickinson School of Law; Bocconi University - Department of Law

February 24, 2010

Penn State Legal Studies Research Paper No. 4-2010
Bocconi Legal Studies Research Paper No. 01-10
ECGI - Law Working Paper No. 147/2010

Abstract:     
In the last few years, also in the light of the financial crisis in which the world has plummeted, the concern for self-referential and unaccountable boards has gained momentum and prompted several important reforms aimed at enhancing shareholders’ democracy. The reforms recently implemented or currently under consideration both at the state and federal levels, focusing on proxy access, might however prove to be too timid to exorcise this specter. This Article discusses the limits of the latest legislative and regulatory initiatives and advances a new, bold if not heterodox, proposal to empower shareholders and better align the composition of the board to the interests of all the owners of the corporation. The core of the proposal is a proportional voting system called "list voting." Building also on a brief comparative analysis, the Article advocates that "list voting" is superior to the traditional U.S. "cumulative voting" both from the point of view of directors, managers and controlling shareholders, and of minority shareholders.

Number of Pages in PDF File: 45

Keywords: Unaccontable Boards, Shareholders’ Democracy, Proxy Access, List Voting, Cumulative Voting

JEL Classification: G38

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Date posted: February 24, 2010 ; Last revised: April 12, 2010

Suggested Citation

Ventoruzzo, Marco, Empowering Shareholders in Directors' Elections: A Revolution in the Making (February 24, 2010). Penn State Legal Studies Research Paper No. 4-2010; Bocconi Legal Studies Research Paper No. 01-10; ECGI - Law Working Paper No. 147/2010. Available at SSRN: http://ssrn.com/abstract=1558467 or http://dx.doi.org/10.2139/ssrn.1558467

Contact Information

Marco Ventoruzzo (Contact Author)
Pennsylvania State University - Dickinson School of Law ( email )
113 Beam Building
University Park, PA 16802
United States
HOME PAGE: https://law.psu.edu/faculty/ventoruzzo
Bocconi University - Department of Law ( email )
Via Roentgen 1
Milan, 20136
Italy
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