Shareholder-Driven Corporate Governance

Abstract

This introductory chapter provides an overview of shareholder-driven corporate governance (SCG). SCG is a broad-based analytical concept that refers to the trend in corporate governance whereby shareholders participate in the governance reforms that public corporations adopt. Participation is defined broadly: it does not merely refer to increases in shareholders’ direct voting power; rather, it encompasses reforms that reduce opportunities for managerial entrenchment (boards and management alike) that generally increase the ability of shareholders to become involved in the day-to-day operation of the business. After setting forth the framework for analyzing shareholders’ role in today’s corporation, the chapter outlines the distinctive features of SCG, such as majority voting and proxy access. It also looks at differences in governance regimes across a number of countries and the impact of these differences on shareholders’ interests.