21 Pages Posted: 7 May 2009 Last revised: 15 Jun 2009
Date Written: May 6, 2009
Many corporate governance observers believe that enhanced shareholder power is a promising cure for governance ills. This paper empirically examines the impact of differential amounts of shareholder power on governance arrangements. When states enacted statutory antitakeover protections in the 1980s, they allowed companies to opt-out of the provisions through various avenues. The states differed in the power granted to shareholders to opt-out of the antitakeover protections without agreement by the board of directors. Although this appears to be an important difference in shareholder power, the paper demonstrates that varying degrees of power are associated with little if any change in governance arrangements. At a minimum, the results suggest that simply altering shareholder power without changing other governance mechanisms is unlikely to lead to widespread changes in corporate governance.
Keywords: corporate governance, shareholder power, charter amendments
Suggested Citation: Suggested Citation
Listokin, Yair, If You Give Shareholders Power, Do They Use It? An Empirical Analysis (May 6, 2009). Yale Law & Economics Research Paper No. 383; CELS 2009 4th Annual Conference on Empirical Legal Studies Paper. Available at SSRN: https://ssrn.com/abstract=1400263 or http://dx.doi.org/10.2139/ssrn.1400263