||The Evolution of Ownership and Control.
Previous research has shown that there is a great variety in ownership
and control arrangements across countries. This diversity has sparked
a lively debate and in order to understand the reasons for such differences,
it was felt that one had to go back in time and look at the evolution
of ownership and control in parallel with the evolution of economic
growth, regulatory reform and politics. This research examines the
evolution of ownership and control. In addition to research at four
training nodes (ECARES, Oxford, LBS, SITE) in this area, the network
will benefit from the expertise of Randall Morck at the Alberta node,
Ailsa Röell at the Princeton node and Mark Roe at the Harvard
Law School node.
||Institutional shareholder activism.
Institutional investors playing the role of “active owners”
are widely believed to prevent and correct corporate governance failure
and to improve corporate performance.However, independent scientific
research has not produced conclusive evidence that institutional shareholder
activism leads to change or better investment performance. On the
contrary, an extensive body of research has shown that “shareholder
activism” in the United States is not effective. The “negative”
studies for the United States have several potential shortcomings
that might drive the results. These shortcomings can be overcome in
the European institutional context. The project will be undertaken
by researchers from Oxford, LBS, ULB and benefit enormously from links
with the Hermes industry node, one of the largest activist pension
funds in Europe.
||Shareholder power and remedies
Legal researchers will focus, inter alia, on measures that empower
shareholders and shareholder remedies. While shareholders have the
right to vote on certain structural changes such as mergers, disposal
of substantially all assets, dissolution, as well as on capital increases
and decreases and appropriation of parts of the corporations profits
(in some jurisdictions), they frequently lack the power to get these
issues on the agenda for shareholder meetings. Thus, the exercise
of the voting power that statutes and articles confer upon shareholders
are, as a rule, dependent on a proposal being submitted by the directors.
Whether this predominance of the board needs to be cut back by giving
shareholders more power to set the agenda of shareholder meetings
is a question that merits further examination from a legal as well
as from an economic perspective. The rules on shareholder remedies
against illegal corporate or shareholder actions as well as the opportunity
to challenge the validity of shareholder resolutions vary significantly
in continental and common law jurisdictions. A comparative legal and
economic study could shed some light on the question if and to what
extent shareholders should have the right to take an active part in
controlling corporate affairs and how such rules should be designed
in order to prevent the types of abuse we’ve encountered in
Germany with respect to the right to challenge shareholder resolutions.