Private Ordering with Shareholder Bylaws

Abstract:     
In this Article, we propose legal reforms to empower shareholders in public corporations. Most shareholders participate in corporate governance in three ways: they vote, they sell, and they sue. We would expand the menu for shareholders in public corporations by enabling them to contract using shareholder bylaws. We contend that private ordering will improve shareholder monitoring of managers and create laboratories of corporate governance that benefit the entire corporate governance system.

Number of Pages in PDF File: 64

Keywords: shareholder empowerment, shareholder bylaws, corporate governance, private ordering, Delaware corporations, Rule 14a-8

JEL Classification: G34, K12, K22, L14, L22

Accepted Paper Series