Making the Corporation Safe for Shareholder Democracy
Lisa M. Fairfax
George Washington University - Law School
Ohio State Law Journal, Vol. 69, No. 53-107, 2008
GWU Legal Studies Research Paper No. 2012-91
GWU Law School Public Law Research Paper No. 2012-91
This article considers the effect that increased shareholder activism may have on non-shareholder corporate stakeholders such as employees and consumers. One of the most outspoken proponents of increased shareholder power has argued that such increased power could have negative repercussions for other corporate stakeholders because it would force directors to focus on profits without regard to other interests. This article critically examines that argument. The article acknowledges that increased shareholder power may benefit some stakeholders more than others, and may have some negative consequences. However, this article demonstrates that shareholders not only have interests that align with other stakeholders, but also introduces empirical evidence suggesting that shareholders may use their increased power to advance the interests of other stakeholders. Thus, this article debunks the notion that increased shareholder power is necessarily problematic for non-shareholder stakeholders.
Number of Pages in PDF File: 56
Keywords: shareholders, voting power, corporate governance, stakeholders
JEL Classification: K22, G30, D72
Date posted: October 13, 2012
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