Two Stories About Shareholders

Corporate law contains two contradictory stories about the role of shareholders. In one, shareholders are a useful countervailing force against self-interested behaviour corporate agents. other, lack motivation, information, and proper incentives to contribute good governance business corporations. Both true on occasion, but is one generally more than other? Currently, developments in securities predicated idea that are, generally, positive governance. This seems be corollary agency cost theory, dominant paradigm for understanding relationships between actors. article reviews body empirical research outcomes various forms shareholder activism. Proposals, proxy campaigns, takeovers represent most impactful costly engagement with As it happens, evidence does tend strongly support shareholders, not currently dominating reform efforts. If character interventions supports story information outcomes, then much current regulatory scene needs re-evaluated.