Shareholder Proposal Rules and Practice: Evidence from a Comparison of the United States and United Kingdom

Shareholder empowerment is one of the most important issues in corporate governance today. Shareholder proposals and board nominations are a part of this empowerment and have become part of the policy debate and reform. The authors provide an in-depth comparison of US and UK shareholder proposal rul...

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Bibliographic Details
Published in:American business law journal 2012-12, Vol.49 (4), p.739-803
Main Authors: Buchanan, Bonnie G., Netter, Jeffry M., Poulsen, Annette B., Yang, Tina
Format: Article
Language:English
Subjects:
Comparative analysis
Empowerment
Proposals
Rules
Shareholder activism
Shareholder voting
Stockholders
Studies
Online Access:Get full text
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Summary:Shareholder empowerment is one of the most important issues in corporate governance today. Shareholder proposals and board nominations are a part of this empowerment and have become part of the policy debate and reform. The authors provide an in-depth comparison of US and UK shareholder proposal rules and relate the differences in rules to differences in proposing activities, using comprehensive shareholder proposal data from both countries from 2000 through 2006. UK proposing rules are more onerous on sponsors, but UK proposals are a potentially more powerful governance device than US counterparts, partly because they are binding and partly because UK shareholders have a statutory right to call special meetings and elect directors. Consequently, the authors observe that most UK proposals are presented at special meetings and they target election of board members. There is some evidence that, while firm performance generally improves after a proposal in the US, in the UK performance does not improve.
ISSN:0002-7766
1744-1714
DOI:10.1111/j.1744-1714.2012.01141.x