The Debate Over Shareholder Democracy

Corporate governance issues can quickly divide directors, management and shareholders. For years there has been a continuing debate over the efficacy and importance of shareholder democracy. In theory, and using loaded political words, like “democracy,” activists who promote shareholder democracy usually have strong talking points. Shareholders own a company. Directors and senior managers act as agents for the shareholders/owners. Directors have fiduciary duties to the company and its shareholders. Everyone agrees on one thing – corporate actors are committed to maximizing shareholder value.