Shareholder voting and engagement in the US have undergone substantial changes over the last 50 years. They have moved from being relatively sleepy issues to those that trigger insomnia in even the most hardened executives. The changes in the ownership structure of US publicly traded firms are probably the most important reason for the shift, but so too are rule changes that have facilitated greater shareholder activism. This chapter explores these developments while describing the rules of the road for shareholder voting in the US by focusing on Delaware jurisprudence and changes in US federal securities regulations. It also examines recent developments in shareholder activism and engagement, potential areas of voting and engagement going forward, and recent legal changes attempting to rein in activism to some extent. There are many moving parts in the shareholder voting apparatus in the US, and where things settle is likely to be a contests and perhaps uncertain matter.

Abstract: This chapter explores the conceptual, measurement, and incidence issues surrounding the costs and benefits of compliance. At the conceptual level, foundational questions are not fully resolved. For example, when speaking of compliance, do we mean compliance with the law or something else (e.g., an ethical code or industry standard)? What a firm is complying with will influence the costs and benefits being considered. Further, are the costs and benefits to be assessed from the perspective of the firm or from the perspective of society? Which one is chosen will impact what are viewed as costs and benefits. At the measurement level, assessing the effects of various compliance initiatives is a fraught exercise as attested to by a voluminous literature. It will typically require the use of multidisciplinary approaches with challenging questions about the unit(s) of measurement, the presence of counterfactuals, difficult to measure items, and difficult to operationalize trade-offs along with many potentially questionable assumptions. Further, embedded within measurement issues will be legal policy choices and structures that influence how, and by whom, the measurement is conducted. Finally, questions of incidence are important but are not often addressed in the literature. For example, if the costs of compliance fall disproportionately on smaller businesses, then what impact does that have on the political sustainability of the compliance initiative, the equity of it, and the competitive structure of the sector subject to these initiatives? Bringing together these considerations allows for a richer and more nuanced understanding of the costs and benefits of compliance and also encourages us to develop more careful theoretical models with which to analyze, and more reliable evidence-based research with which to assess, compliance initiatives.