Research Handbooks in Corporate Law and Governance series
Edited by Jennifer G. Hill and Randall S. Thomas
Chapter 26: Shareholder empowerment in controlled companies: the case of Singapore
Shareholder empowerment has acquired a prominent position in the corporate governance discourse in recent years, particularly in the aftermath of the global financial crisis. Regulators around the world are undertaking efforts to engender greater (and more active) participation of minority shareholders in corporate decision-making. At the same time, activist shareholders have begun to adopt an aggressive stance in companies in which they have invested, thereby causing an upheaval in several corporate boardrooms. The debate regarding the utility of shareholder empowerment as a corporate governance mechanism has been somewhat polarized: its proponents seek greater impetus towards shareholder democracy, while its critics claim that it undermines shareholder value and begets short-termism. The empirical evidence regarding the success (or otherwise) of shareholder empowerment continues to be inconclusive. It is by now well accepted that corporations around the world can be categorized into two groups. First, there are corporations with dispersed shareholding (i.e. the customary Berle and Means corporations) that are largely prevalent in the United States (US) and the United Kingdom (UK) (Tan 2010). Then, there are companies with concentrated shareholding that populate most other countries, especially in Asia and Europe. Despite this dichotomy in corporate structures, the current literature on shareholder empowerment has largely been agnostic to such a distinction. More so, a substantial part of the debate has been grounded firmly in the context of the Berle and Means corporation.
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