Bebchuk's Case for Increasing Shareholder Power: An Opposition

11 Pages Posted: 3 Jun 2007

See all articles by Theodore N. Mirvis

Theodore N. Mirvis

Wachtell, Lipton, Rosen & Katz

Paul K. Rowe

Wachtell, Lipton, Rosen & Katz

William Savitt

Wachtell, Lipton, Rosen & Katz

Date Written: May 2007

Abstract

This paper sets out the view that Lucian Bebchuk's "case for increasing shareholder power" is exceedingly weak. It demonstrates that Bebchuk's proposed overthrow of core Delaware corporate law principles risks extraordinarily costly disruption without any assurance of corresponding benefit; that Bechuk's case is unsupported by any persuasive empirical data; that Bebchuk's premise that corporate boards cannot be trusted to respect their fiduciary duty finds no resonance in the observed experience of boardroom practitioners (perhaps not surprisingly, as the proposal comes from the height of the ivory tower); and that its obsession with shareholder power is particularly suspect (if not downright dangerous) in light of the palpable practical problems of any shareholder-centric approach.

Keywords: Corporate governance, shareholders, boards, directors

JEL Classification: D70, G30, G32, G34, G38, K2

Suggested Citation

Mirvis, Theodore N. and Rowe, Paul K. and Savitt, William, Bebchuk's Case for Increasing Shareholder Power: An Opposition (May 2007). Harvard Law and Economics Discussion Paper No. 586. Available at SSRN: https://ssrn.com/abstract=990057 or http://dx.doi.org/10.2139/ssrn.990057

Theodore N. Mirvis (Contact Author)

Wachtell, Lipton, Rosen & Katz ( email )

51 West 52nd Street
New York, NY 10019
United States

Paul K. Rowe

Wachtell, Lipton, Rosen & Katz ( email )

51 West 52nd Street
New York, NY 10019
United States
212-403-1000 (Phone)

William Savitt

Wachtell, Lipton, Rosen & Katz ( email )

51 West 52nd Street
New York, NY 10019
United States
212-403-1329 (Phone)
212-403-2329 (Fax)

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