Corporate law and governance are at the forefront of regulatory activities worldwide, and subject to increasing public attention in the wake of the Global Financial Crisis. Comprehensively referencing the key debates, the Handbook provides a much-needed framework for understanding the aims and methods of legal research in the field.

The Foundations and Anatomy of Shareholder Activism examines the landscape of contemporary shareholder activism in the UK. The book focuses on minority shareholder activism in publicly listed companies. It argues that contemporary shareholder activism in the UK is dominated by two groups; one, the institutional shareholders whose shareholder activism is largely seen as a driving force for good corporate governance, and two, the hedge funds whose shareholder activism is based on value extraction and exit. The book provides a detailed examination of both types of shareholder activism, and discusses critically the nature of, motivations for and consequences following both types of shareholder activism. The book then locates both types of shareholder activism in the theory of the company and the fabric of company law, and argues that institutional shareholder activism based on exercising a voice at general meetings is well supported in theory and law. The call for institutions to engage in more informal forms of activism in the name of 'stewardship' may bring about challenges to the current patterns of activism that institutions engage in. The book argues, however, that a more cautious view of hedge fund activism and the pattern of value extraction and exit should be taken. More empirical evidence is likely to be necessary, however, to weigh up the long terms benefits and costs of hedge fund activism.

Reconceptualises the general meeting, controlling shareholders and institutional investors as fiduciaries in four leading common law Asian jurisdictions.

This Element is an excerpt from Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences (9780132180269) by David Larcker and Brian Tayan. Available in print and digital formats. A primer on what corporate board members should be doing: expert guidance on advisory and monitoring functions, compliance, fiduciary duty, independence, and more. When asked what areas directors should pay most attention to, other than profitability and shareholder value, directors list future growth, risk management, and development of human capital as top priorities. Other areas of focus include cultural development, executive compensation, and compliance. Still, some evidence indicates that directors prefer advisory functions to monitoring functions....

Hedge Fund Activism begins with a brief outline of the research literature and describes datasets on hedge fund activism.

In recent years, activist hedge funds have been experimenting with a novel practice in corporate governance: offering their candidates for the board of directors millions of dollars in bonus pay through a device known as a "golden leash." Such arrangements, which are highly controversial, award directors for accomplishing activist objectives. An emerging body of work views the golden leash through the same polarized lens as activism itself: either the leash locks directors in to a self-serving, "short-termist" agenda, or it creates incentives for them to be better advocates for shareholders. This binary framing obscures some of the golden leash's most promising qualities. Though novel and associated with shareholder activists, the golden leash belongs to a larger class of well-established, mainstream legal structures that reduce agency costs and increase expertise at individual firms by, paradoxically, tying directors to multiple firms. These structures include corporate governance innovations in two other areas of the capital markets: the venture capital ecosystem and the practice of corporate directors sharing information with outside entities. Like the golden leash, both of these models create overlapping obligations for directors. Yet these arrangements are welcomed by scholars, courts, and firms on the grounds that they improve enterprise value and corporate governance by quietly blending loyalties, notwithstanding the fact that they also make conflicts of interest more likely. The golden leash thus follows in a coherent, if unheralded, tradition of structures that forge ultraclose bonds between directors and outside shareholders. This Article argues that the risks posed by this blending of duties should be discounted by the availability of mechanisms to manage any conflicts that result and by advantages conferred in capital formation and governance. Properly designed and disclosed, the golden leash can promote not only superior returns but consensus-building, dialogue, and other values important to sound corporate governance.