DAVID K. MUSTO, University of Pennsylvania - Finance Department
Email: musto@wharton.upenn.edu

The votes that come with equities barely figure in retail investment decisions, especially the decisions aided by robo?advisors. This low profile is consistent with the tiny effect a retail investor's votes would have, if she took them seriously. But despite this disinterest in voting implications, or possibly because of it, recent trends in retail investment decisions are reshaping the corporate?governance landscape by creating new and different blocks of voting power. In this paper I review the relevant trends and consider the implications for public corporations.

Full Text Available Here: https://doi.org/10.1002/cfp2.1105

HIROYUKI WATANABE, Waseda University, Faculty of Law
Email: watanabe-cls@waseda.jp

This paper presents a solution for Japanese Companies Act and comparative law analysis on hypothetical case regarding “abuse of shareholder rights”. It is based on “Mathias Siems and David Cabrelli (eds), Comparative Company Law - A Case-Based Approach, 2nd edition (Oxford, Hart Publishing, 2018)” which I participated in writing as one of the co-authors. In that book, this case was prepared by German scholar, then lawyers from 12 countries (9 European countries, US, Japan and South Africa) responded to it based on their own law, and finally, based on these 12 case solutions the questioner wrote the case report.

This paper added the results of joint research with lawyers and businessmen from various jurisdictions at Waseda University L.L.M. and Business School, based on hypothetical case. With the addition of Belgium, China, South Korea, Taiwan, Singapore and Brazil as new jurisdictions, consequently comparative law research covering 19 countries have conducted. In particular, research on corporate law in Asian countries has been strengthened. Also it was tried to explain and analyze the solutions of European countries from a practical point of view. (The author is solely responsible for this paper, but details of case studies in each jurisdiction and comparative law research with Japanese law will be posted separately at a later date.)

?Also, in the Appendix, I will explain the limitation of abusive exercise of shareholders’ rights to propose under the 2019 Amendment on the Companies Act in Japan. This Amendment limits the number of proposals that companies with boards of directors can request shareholders to be notified of the details before the general shareholders meeting to 10 in principle. There, consideration has been given so that necessary proposals can be fully proposed. In addition, the introduction of restrictions on the content of proposals and the purpose of exercising shareholders’ rights to propose was forgone. It can be said that restrictions have been placed only when there is a high need for measures against abusive exercise.

NEETHA ROSE C D, Kerala Agricultural University
Email: neethaageco2009@gmail.com
APARNA RADHAKRISHNAN, affiliation not provided to SSRN

The involvement of business firms in the growth and developmental activities in order to internalise the society's resource loss is termed as Corporate Social Responsibility (CSR). The present study examines the evolution of CSR regulations and its present status in India. India is the first country to mandate CSR spending by the corporate firms with the help of legislation, section 135 of Companies Act, 2013. Even though the act got stronger by the introduction of more strict regulations during the amendment in 2019, it lacks specific penal provision for non-compliance. Currently, the CSR compliance is 40 per cent. The aggregate CSR amount of ? 711.9 billion were spent in 14 different development sectors over a period of five years. The education sector received highest aggregate amount and accounted for 38 per cent of aggregate spending under CSR activities. On an average, over the last five years, number of CSR non-compliant companies has increased at the rate of 6.72 per cent and the data clearly points out the requirement of strict penalty for CSR non-compliance. The transparency in CSR disclosure and proper evaluation of CSR activity outcome is vital to understand the drawbacks which would help in refining existing regulations and developing a better enforcement strategy to obtain desired outcomes.

DAVID MIN, California State Senate, University of California, Irvine School of Law, University of California, Irvine School of Law, University of California, Irvine School of Law
Email: dmin@law.uci.edu

Congress and federal financial regulators have long prioritized the safety and soundness of banking firms. But at the same time, the directors and officers of banking firms are legally bound to prioritize shareholder wealth maximization, which creates incentives for risk-taking that work against these regulatory goals. This shareholder primacy norm has long been a central feature of corporate governance, but as I describe in this Article its application to banks was not a deliberate policy choice but rather a historical accident. Indeed, banks possess several unique features that make shareholder wealth maximization an inapt governance priority for them. Banks are highly leveraged, which increases the importance of creditor agency costs. Banks also enjoy government guarantees, either explicit or implicit, on their short-term debt, and thus their governance is a matter of public concern. Finally, bank failures result in high negative externalities, and this also creates a strong public interest in bank safety and soundness.

This Article argues that a new federal governance regime for banking institutions is appropriate and consistent with the historical purposes of banking regulations and charter oversight in the United States. Furthermore, such a regime would reduce the tensions between the law of state entities and the sprawling federal banking regulatory framework created by Congress, and harmonize the internal governance of banking firms with the broader goals of external banking regulations. Finally, I offer some thoughts on the key principles that should be present in any such federal governance regime for banking.

For too long, we have tolerated a “cat-and-mouse” dynamic in banking, one in which regulators have sought to identify and address risky practices while knowing that the directors and officers of banking firms have strong incentives to take on higher risk. By changing this paradigm and realigning the incentives inherent in banking governance, we can take a major step towards ensuring long-term stability in our financial system.

LEON YEHUDA ANIDJAR, Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)
Email: leon.anidjar@mail.huji.ac.il

Legal systems around the world apply various strategies to mitigating agency costs between controlling and minority shareholders. A systematic review of the transnational law on controlling shareholder's loyalty and care obligations reveals variant doctrinal choices. This study aims to uncover the evolution of these choices by employing a law-in-context methodology. T