Table of Contents

Research Handbook on Shareholder Power

Research Handbook on Shareholder Power

Research Handbooks in Corporate Law and Governance series

Edited by Jennifer G. Hill and Randall S. Thomas

Much of the history of corporate law has concerned itself not with shareholder power, but rather with its absence. Yet, as this Handbook shows, there have been major shifts in capital market structure that require a reassessment of the role and power of shareholders. This book provides a contemporary analysis of shareholder power and considers the regulatory consequences of changing ownership patterns around the world. Leading international scholars in corporate law, governance and financial economics address these central issues from a range of different perspectives including historical, contemporary, legal, economic, political and comparative.

Chapter 26: Shareholder empowerment in controlled companies: the case of Singapore

Luh Luh Lan and Umakanth Varottil

Subjects: law - academic, corporate law and governance

Extract

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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