Shareholder Cultivation and New Governance

Tamara Belinfanti

New York Law School

February 13, 2014

Forthcoming in Delaware Journal of Corporate Law (DJCL), 2014

Several formal proposals have been made to address shareholder short-termism and speculative behavior. These include the imposition of a financial transaction tax, changes to the U.S. capital gains tax rate, and the adoption of an Investor Stewardship Code in the United Kingdom. This Article reverses the focus from looking to top-down solutions to looking at bottom-up grass root solutions that corporations can employ, and in some cases do already employ to achieve substantially the same effect of rewarding certain types of shareholder behavior while dissuading others — a process I refer to as “Shareholder Cultivation.” While many of the techniques and strategies discussed in this Article are not new and in fact many have been used by companies and investor relation professionals for years, the Article is the first to conceptualize a prescriptive framework for assessing which techniques and strategies should be allowed. Additionally, the Article utilizes new governance theory to examine the concept of Shareholder Cultivation with a fresh lens: as a corporate governance benefit.

Number of Pages in PDF File: 99

Keywords: corporate governance, shareholder cultivation, steward, new governance, loyalty

JEL Classification: G30, K20, K22, K33, L10, L20, L21, L50, M10, M14

Accepted Paper Series

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Date posted: February 14, 2014  

Suggested Citation

Belinfanti, Tamara, Shareholder Cultivation and New Governance (February 13, 2014). Forthcoming in Delaware Journal of Corporate Law (DJCL), 2014. Available at SSRN: http://ssrn.com/abstract=2395314

Contact Information

Tamara Belinfanti (Contact Author)
New York Law School ( email )
185 West Broadway
New York, NY 10013
United States
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