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The Rhetoric and Reality of Shareholder Democracy and Hedge-Fund Activism

Expected online publication date:  19 August 2024

Jan-Sup Shin
Affiliation:
National University of Singapore

Summary

This Element investigates the historical and systemic roots of hedge-fund activism. It argues that the spirit of the New Deal financial regulations was subverted in the 1980s and 1990s in the name of shareholder democracy and opened the door for the rise of hedge-fund activism. It analyzes the effects of regulatory reforms including the introduction of compulsory voting by institutional investors, proxy-voting rule changes that greatly facilitated aggregation of the proxy votes of institutional investors, and rules that allow hedge funds to draw effectively limitless alternative investments from institutional investors. This Element also evaluates the recent empirical research on hedge-fund activism and explains why shareholder activism has gone awry. It argues that the regulatory changes created a large vacuum in the arena of corporate voting that hedge-fund activists can effectively exploit for their own profits. It concludes with policy proposals for rebuilding the proxy-voting and engagement system.
Type
Element
Information
Online ISBN: 9781009576444
Publisher: Cambridge University Press

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The Rhetoric and Reality of Shareholder Democracy and Hedge-Fund Activism
  • Jan-Sup Shin, National University of Singapore
  • Online ISBN: 9781009576444
Available formats No formats are currently available for this content.
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The Rhetoric and Reality of Shareholder Democracy and Hedge-Fund Activism
  • Jan-Sup Shin, National University of Singapore
  • Online ISBN: 9781009576444
Available formats No formats are currently available for this content.
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To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

The Rhetoric and Reality of Shareholder Democracy and Hedge-Fund Activism
  • Jan-Sup Shin, National University of Singapore
  • Online ISBN: 9781009576444
Available formats No formats are currently available for this content.
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