Shareholder Cultivation and New Governance

84 Pages Posted: 10 Apr 2014

Date Written: 2014

Abstract

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 top-down solutions and instead, focuses on 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 discouraging 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.

Keywords: Delaware, Journal, Corporate Law, Governance, Shareholder

Suggested Citation

Belinfanti, Tamara, Shareholder Cultivation and New Governance (2014). Delaware Journal of Corporate Law (DJCL), Vol. 38, No. 3, 2014, NYLS Legal Studies Research Paper No. 13/14 #75, Available at SSRN: https://ssrn.com/abstract=2422576

Tamara Belinfanti (Contact Author)

New York Law School ( email )

185 West Broadway
New York, NY 10013
United States

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