Sunday, January 18, 2009
The Quiet Revolutionary: The Absence of Retail Investors in Contested Corporate Elections, by Lee A. Harris, University of Memphis - Cecil C. Humphreys School of Law, was recently posted on SSRN. Here is the abstract:
Shareholder-led campaigns to install new leadership at U.S. firms occur too rarely and, when they do occur, are led by the same boring, cast of characters too often. This Article presents empirical evidence that the system of contested corporate elections is broken. When it comes to the interests of retail investors-i.e., individuals usually with small stakes in a particular firm-the evidence suggests that contested corporate elections are virtually off-limits. Retail investors almost never launch a campaign and their interests are not represented well by those who do. This Article presents empirical evidence that the lop-sided nature of the current structure reduces the number of contested corporate elections overall, particularly those that, but for the rules, would originate from retail investors.