From Shareholder Stewardship to Shareholder Duties: Is the Time Ripe?

Chiu, Iris H‐Y; Katelouzou, Dionysia

doi:10.2139/ssrn.2731241

Cited by 7 publications

(9 citation statements)

References 17 publications

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“…200 The strengthening of shareholder rights in respect of companies' decision-making processes may 'encourage investor interest in pan-European equity markets, therefore contributing to the much-needed European initiative to develop deep and liquid capital markets in order to provide corporate finance'. 201 The macro-level investigation of the fiduciary duties of controlling shareholders discussed in the previous parts of this study has taught us that the doctrinal choices made by different legal systems are very often the result of a unique cultural environment and changes in business history. This implies that jurists and policymakers should be careful before they decide to adopt doctrinal choices in different parts of corporate governance that will result in a global convergence of legal norms.…”

Section: Uk Lawmentioning

confidence: 99%

A macro-level investigation of transatlantic controlling shareholder's fiduciary duty

Anidjar

2021

Legal stud.

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Legal systems around the world apply various strategies to mitigate agency costs between controlling and minority shareholders. A systematic review of the transnational law on the loyalty and care obligations of controlling shareholders reveals various doctrinal choices. This study aims to uncover the evolution of these choices by employing a law-in-context methodology. Accordingly, it seeks to explain the differences in governance selections by exploring the cultural, historical and socio-economic backgrounds of the particular legal systems in which organisations and decisions are embodied. I conduct a macro-level inquiry which focuses on the cultural environment and business history development to understand different doctrinal designs. In particular, I argue that those dissimilarities are a result of unique cultural-non-formal norms of corporate governance regarding the protection afforded to shareholders’ interests and they correspond to the historical development of the law of corporate groups across nations. As the macro-level investigation indicates, any initiative to globally converge corporate law and governance should be carried out with caution because it may distort the delicate normative equilibrium represented in a given jurisdiction.

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Section: Uk Lawmentioning

confidence: 99%

A macro-level investigation of transatlantic controlling shareholder's fiduciary duty

Anidjar

2021

Legal stud.

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“…Most considered the initial UK code to be weak due to its limited coverage (Cheffins, 2010), lack of enforceability (Reisberg, 2015) and the fact that it ignored many of the well‐known practical barriers to shareholder engagement (Chiu, 2013; Reisberg, 2015). Despite these limitations, several scholars still conclude that stewardship codes have normative power and provide helpful foundations for change (Arsalidou, 2012; Chiu and Katelouzou, 2016). Following the UK's lead, many more countries have now adopted stewardship codes and this has permitted the emergence of early international comparative work in the literature.…”

Section: Stewardship Codes and Comparative Corporate Governancementioning

confidence: 99%

Stewardship Codes and the Role of Institutional Investors in Corporate Governance: An International Comparison and Typology

Klettner¹

2021

British J of Management

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Over recent decades, share ownership of listed companies has concentrated into the hands of large institutional investors, challenging the traditional agency theory view of corporate governance as a mechanism to resolve the separation of ownership and control. Alternative theories have emerged to explain the role of institutional investors in corporate governance, each with a slightly different view on the motivations of these powerful shareholders and the nature of their relationship with corporate management. These theories share a common thread -the concept of investor stewardship -yet each theory applies it differently. This paper explores whether institutional investors should act primarily as stewards of their investee companies (agency theory), stewards of beneficiaries' funds (agency capitalism), stewards of a market/economy (universal ownership) or stewards of society (stakeholder theory), and whether this varies internationally. Through an analysis of national stewardship codes, the paper determines which of these theoretical approaches are most strongly reflected in emerging stewardship policy across the world. It presents a typology of stewardship codes as a framework for understanding cross-country variation in investor stewardship policy. Stewardship codes influence the shareholder-manager relationship and can encourage integration of wider economic and societal concerns into corporate finance.

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“…Nor do we find that the proprietary rights derived from share ownership entail any duties in general. 12 Moreover, shareholders have been considered to be free to choose whether or not to exercise the rights they have been given, 13 and they are not obliged to do so. 14 8 Pennington Shareholder rights were at the core of the 2007 Shareholder Rights Directive.…”

Section: Why Shareholders?mentioning

confidence: 99%

From Shareholder Rights to Shareholder Duties – A Transformation of Eu Corporate Governance in a Sustainable Direction?

Birkmose

2018

iele

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Corporate governance discussions in Europe on shareholders' rights have increasingly been replaced by discussions on shareholders' duties. This trend is reflected in company and capital markets law, where shareholders increasingly are imposed duties towards investee companies. For example, the legalization of shareholders' duties was a key element in the EU Commission's amendment to the Shareholder Rights Directive in 2017 (Directive 2017/828). A key to this transformation is shareholder accountability, in particular in relation the share ownership of institutional investors. Thus, the transformation bodes a break with an embedded perception according to which the relationship between shareholders and the investee company reflects a private ordering at the center of the European corporate governance model. The increased focus on shareholder accountability emphasizes the societal aspect of share ownership and, more generally, the interest that society holds in public limited liability companies. On the basis of a discussion of the amended Shareholder Rights Directive and the possible implications of this transformation, the paper concludes is that it is questionable whether shareholders can serve as a reliable vehicle for transformation of company law towards a more sustainable framework.

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From Shareholder Stewardship to Shareholder Duties: Is the Time Ripe?

Cited by 7 publications

References 17 publications

A macro-level investigation of transatlantic controlling shareholder's fiduciary duty

A macro-level investigation of transatlantic controlling shareholder's fiduciary duty

Stewardship Codes and the Role of Institutional Investors in Corporate Governance: An International Comparison and Typology

From Shareholder Rights to Shareholder Duties – A Transformation of Eu Corporate Governance in a Sustainable Direction?

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