The Political Imposture of Passive Capital
Journal of Corporate Law Studies, Vol. 9, p. 139, April 2009
31 Pages Posted: 19 Mar 2009 Last revised: 27 Apr 2009
Date Written: March 1, 2009
Abstract
Considerable political freight attaches to the notion that passive capital is vulnerable. Dimensions of that idea have been important in defining the contours of much corporate regulation. The endorsement or defence of the interests of passive capital, however, may be imposture. It often serves active capital to embrace the "vulnerability" of passive capital. The legal structure moulded to acknowledge and counterbalance the passivity of passive capital may be exploited to secure the incumbency and objectives of dominant coalitions. Our regulatory designs must be attentive to the potential for the passive capital elevation of active capital.
Keywords: passive shareholder, passive capital, control, corporate governance, limited liability, corporate democracy, shareholder primacy, director primacy
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