Toward a True Corporate Republic: A Traditionalist Response to Bebchuk's Solution for Improving Corporate America

A comment on Professor Lucian Bebchuk's typically thoughtful article, The Case for Increasing Shareholder Power, is presented. In that article, Bebchuk sets out a reform proposal designed to meet some of the objections of skeptics who doubt the desirability of increasing shareholder power to in...

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Bibliographic Details
Published in:Harvard law review 2006-04, Vol.119 (6), p.1759-1783
Main Author: Strine, Leo E.
Format: Article
Language:English
Subjects:
Bebchuk, Lucian A
Boards of directors
Business structures
Corporate governance
Corporate regulation
Corporation law
Corporations
Decision making
Fiduciary duties
Investors
Laws, regulations and rules
Political candidates
Powers and duties
Proxy statements
Reforms
Responses to Increasing Shareholder Power
Shareholders
Stockholders
Traditionalism
Voting
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Summary:A comment on Professor Lucian Bebchuk's typically thoughtful article, The Case for Increasing Shareholder Power, is presented. In that article, Bebchuk sets out a reform proposal designed to meet some of the objections of skeptics who doubt the desirability of increasing shareholder power to influence corporate decisionmaking. This essay proceeds in four steps. Initially, I summarize Bebchuk's policy proposal. Then, I describe in colloquial terms the perspective many traditionalist investors have about corporate governance. From there, I identify why Bebchuk's policy proposal likely would not find favor with such investors. Finally, I set forth, for illustrative purposes, the type of proposal to increase stockholder clout that might serve as the basis for a responsible reform that would address the legitimate concerns of traditionalists. This proposal would periodically bolster the ability of stockholders to run a competing slate of directors against an incumbent board they believe is performing poorly.
ISSN:0017-811X
2161-976X