The Experts below are selected from a list of 172866 Experts worldwide ranked by ideXlab platform
Ronald J Gilson - One of the best experts on this subject based on the ideXlab platform.
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controlling family Shareholders in developing countries anchoring relational exchange
Stanford Law Review, 2007Co-Authors: Ronald J GilsonAbstract:The Law and Finance account of the ubiquity of controlling Shareholders in developing markets is based on conditions in the capital market: poor shareholder protection law prevents controlling Shareholders from parting with control out of fear of exploitation by a new controlling shareholder who acquires a controlling position in the market. This explanation, however, does not address why we observe any minority Shareholders in such markets, or why controlling Shareholders in developing markets are most often family-based. This paper looks at the impact of bad law on shareholder distribution in a very different way. Developing countries typically provide not only poor minority protection, but poor commercial law generally. Specifically, the paper considers the impact on the distribution of Shareholders of conditions in the product market, where the driving legal influence is the quality of commercial law that supports the corporation's actual business activities, and where the presence of a controlling family shareholder may help support reputation-based trading in a bad commercial law environment.
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controlling Shareholders and corporate governance complicating the comparative taxonomy
Harvard Law Review, 2005Co-Authors: Ronald J GilsonAbstract:The focus of comparative corporate governance scholarship is shifting from takeovers to controlling Shareholders in recognition of the fact that public corporations everywhere but in the U.S. and U.K. are characterized by a shareholder with effective voting control. Debate is now turning to the merits of controlling shareholder systems, both on their own terms and in comparison to the U.S. and U.K. widely held shareholding pattern. To date, the debate has treated the controlling versus widely held distinction as central, disagreeing over whether a particular country owed its characteristic shareholder distribution to the quality of minority shareholder legal protection or to politics. This simple dichotomy is far too coarse to provide an understanding of the diversity of ownership structures and their policy implications. This article complicates the analysis of controlling Shareholders and corporate governance by providing a more nuanced taxonomy of controlling shareholder systems. In particular, it distinguishes between efficient and inefficient controlling Shareholders, and between pecuniary and non-pecuniary private benefits of control. The analysis establishes that the appropriate dichotomy is between countries with functionally good law, which support companies with both widely held and controlling shareholder distributions, and countries with functionally bad law, which support only controlling shareholder distributions. In this account, the United States and Sweden are the same side, rather than on opposite sides of the dividing line. The articles examines the different understanding of the role of controlling Shareholders in corporate governance and the policy implications that flow from a taxonomy that focuses on support of diverse shareholder distributions.
Edward B Rock - One of the best experts on this subject based on the ideXlab platform.
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shareholder eugenics in the public corporation
Cornell Law Review, 2012Co-Authors: Edward B RockAbstract:In a world of active, empowered Shareholders, the match between Shareholders and public corporations can potentially affect firm value. This article examines the extent to which publicly held corporations can shape their shareholder base. Two sorts of approaches are available: direct/recruitment strategies; and shaping or socialization strategies. Direct/recruitment strategies through which “good” Shareholders are attracted to the firm include: going public; targeted placement of shares; traditional investor relations; the exploitation of clientele effects; and de-recruitment. “Shaping” or “socialization” strategies in which Shareholders of a “bad” or unknown type are transformed into Shareholders of the “good” type include: choice of domicile; choice of stock exchange; the new “strategic” investor relations; and capital structure. For each type of strategy, I consider the extent to which corporate and securities law facilitates or interferes with the strategy, as well as the ways in which it controls abuse. In paying close attention to the relationship between shareholder base and firms, this article attempts to merge investor relations, very broadly construed, with corporate governance.
Christoph Van Der Elst - One of the best experts on this subject based on the ideXlab platform.
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Shareholder Engagement and Shareholder Voting Modes: Two of a Different Kind
SSRN Electronic Journal, 2019Co-Authors: Christoph Van Der ElstAbstract:This paper provides evidence that remote voting became the current technique for voting. Based on data for French companies, I found that gradually more and more Shareholders, and not only institutional Shareholders, vote in absentia. While a controlling shareholder continues to participate and vote in the general meeting in personam, other large Shareholders, including institutional investors, make use of the technique of remote voting. Next, a decreasing group of Shareholders with very small stakes attend the general meeting in person or empower the chairman of the board to vote. Consequently, shareholder engagement cannot take place in the general meeting. The ‘forum function’ of this “physical” general meeting of Shareholders as the place where presentations by the board are followed by a fruitful debate and discussion with the Shareholders helping to further form their opinion before issuing an informed vote, is eroded. New technological developments should be considered for shareholder engagement. Distributed ledger technology, like blockchain, is certainly one avenue that deserves further study to serve as an alternative tool for the development of the voting and communication process in an accessible, open and transparent way.
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Shareholder Rights and Shareholder Activism: The Role of the General Meeting of Shareholders
SSRN Electronic Journal, 2012Co-Authors: Christoph Van Der ElstAbstract:An appropriate division of power between the board of directors and Shareholders of the company is quintessential for the success of the company. However, for a long period of time the monitoring powers of the Shareholders were limited. Recently, both the European and the national member states’ legislators refined corporate law and allocated more (monitoring) powers in the hands of the (general meeting of) Shareholders. This paper addresses in a comparative perspective the powers of the general meeting in five countries. First, the power of the Shareholders that is provided through the European company law directives is briefly described. Next the “national” powers of (1) ordinary general meetings and (2) extra-ordinary meetings are addressed and compared. Third, the law in action is used to analyse the developments of shareholder rights and shareholder activism and to discuss whether the law and regulations provide in the appropriate Shareholders rights.
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Revisiting Shareholder Activism at AGMs: Voting Determinants of Large and Small Shareholders
SSRN Electronic Journal, 2011Co-Authors: Christoph Van Der ElstAbstract:Using a sample of voting turnouts of annual general meetings of European companies, we document that shareholder voting turnouts are significantly different according to the ownership structure of the company. Different types of shareholder classes show different voting engagements according to the ownership concentration and the ownership structure. The number of directors that stand up for (re)election positively influences voting turnouts. Special resolutions like changes of the articles of associations have no major impact on Shareholders’ engagements. Corporate performance and other governance mechanisms do not change shareholder activism measured as voting turnout. These results provide important benchmarks for the current debate of shareholder empowerment. The agenda and hence the role of Shareholders should be restructured. The AGM should be used as a strategic governance tool for director elections while the central decision making body should be the board, balancing shareholder primacy with board primacy.
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Law and Economics of Shareholder Rights and Ownership Structures: How Trivial are Shareholder Rights for Shareholders?
SSRN Electronic Journal, 2010Co-Authors: Christoph Van Der ElstAbstract:Law and Finance theory stresses the importance of shareholder rights for the reliability and development of capital markets. Many European Parliaments picked up this corporate governance issue. We expand the analysis of Lele and Siems (2007) and show that the number of shareholder rights grew steadily in many countries over the last fifteen years. In particular the protection of Shareholders against shirking of the board members and the officers increased significantly. The protection of minority Shareholders against the expropriation of major Shareholders remained unchanged. In light of these findings, it can be expected that after a time lag ownership concentration would decrease in continental Europe. However, our evidence is mixed. The analysis of the development of shareholder structures from different perspectives - ownership concentration, shareholder classes and ownership distribution - revealed only limited support for the Law and Finance arguments. The results cause serious doubts on the influence of shareholder rights on ownership structures and the development of liquid capital markets. That is not to say, shareholder rights have no added value and should be abolished. The mixed evidence suggests that other variables, like the presence of activist Shareholders, might be much more influential than the development of shareholder rights.
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Shareholder Rights and the Importance of Foreign Shareholders
SSRN Electronic Journal, 2010Co-Authors: Christoph Van Der ElstAbstract:In many countries Shareholders were offered more rights to protect their position against “inappropriate” behaviour of other corporate constituents. Whether these developments resulted in more market participation and deeper and more liquid markets, as argued in law and finance theory, remained an open question. For a large sample of European listed companies we reveal part of the answer: we analyse the evolution of the investment behaviour of foreign Shareholders in a large sample of European companies between 1999 and 2007. A steadily growing number of all large stakes belong to foreign Shareholders. However, the average voting block of a foreign shareholder decreased in all countries but in Germany. The results show that the hypothesis of a straightforward inverse linear relationship between shareholder rights and ownership concentration is not confirmed. Other features drive the development of ownership structures. These factors are of a legal nature, like the mandatory bid threshold, or are more shareholder specific, like the investment contraints of UCITS.
D Kemsley - One of the best experts on this subject based on the ideXlab platform.
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dividend taxation in firm valuation new evidence
Journal of Accounting Research, 1999Co-Authors: T-s Harris, D KemsleyAbstract:In this paper we develop a residual-income model showing how taxes on dividends affect the relative valuation of retained earnings versus contributed equity, as well as the value of expected future earnings. Tests of predictions from our model for a sample of Compustat firms from 197594 suggest that overall firm value, and the relative valuation weights investors assign to retained earnings, contributed equity, and current earnings, all critically depend on dividend taxes. The findings also suggest that investors take a proprietary perspective in valuation and impute an unrecorded shareholder-level tax liability on retained earnings. The U.S. tax system subjects retained earnings to dividend taxes upon distribution to Shareholders, while contributed equity is returned to Shareholders as a nontaxable return of capital. From the shareholder's (proprietary) perspective, therefore, retained earnings should be valued on
Deniz M Yavuz - One of the best experts on this subject based on the ideXlab platform.
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investor protection and asset prices
Review of Financial Studies, 2019Co-Authors: Suleyman Basak, Georgy Chabakauri, Deniz M YavuzAbstract:Empirical evidence suggests that investor protection has significant effects on ownership concentration and asset prices. We develop a dynamic asset pricing model to address the empirical regularities and uncover some of the underlying mechanisms at play. Our model features a controlling shareholder who endogenously accumulates control over a firm and diverts a fraction of its output. Better investor protection decreases stock holdings of controlling Shareholders, increases stock mean-returns, and increases stock return volatilities when ownership concentration is sufficiently high, consistent with the related empirical evidence. The model also predicts that better protection increases interest rates and decreases the controlling shareholder's leverage.
