Shareholder Empowerment

How can shareholders play a more active role in the corporation? Which institutional arrangements can awaken this sleeping giant and channel its power in a beneficial direction? This book explores three delegation arrangements which are of particular interest from a shareholder empowerment perspective: the board of directors, pension funds, and corporate vote buying. It argues that – in order to be truly effective – the delegation of monitoring and voting power should generally be made subject to a competitive process. Two out of the tree arrangements – competitive director elections and the free choice of pension funds – hold promise of leading to an actual empowerment of shareholders while the third – corporate vote buying – appears to disempower rather than empower them.