Empty voting and hidden (morphable) ownership: Taxonomy, implications, and reforms

Henry T C Hu*, Bernard Black

*Corresponding author for this work

    Research output: Contribution to journalReview articlepeer-review

    43 Scopus citations

    Abstract

    This article analyzes the new vote buying and its corporate governance implications. We propose a taxonomy of the new vote buying that unpacks its functional elements. We discuss the implications of decoupling for control contests and other forms of shareholder oversight, and the circumstances in which decoupling could be beneficial or harmful to corporate governance. We also propose a near-term disclosure-based response and sketch longer-term regulatory possibilities. Our disclosure proposal would simplify and partially integrate five existing, inconsistent share-ownership disclosure regimes, and is worth considering independent of its value with respect to decoupling. In the longer term, other responses may be needed; we briefly discuss possible strategies focused on voting rights, voting architecture, and supply and demand forces in the markets on which the new vote buying relies.

    Original languageEnglish (US)
    Pages (from-to)1011-1070
    Number of pages60
    JournalBusiness Lawyer
    Volume61
    Issue number3
    StatePublished - May 1 2006

    ASJC Scopus subject areas

    • Law
    • Organizational Behavior and Human Resource Management

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