Comments on: Proxy Access

By: Robin Hanson

Robin Hanson — Sun, 16 May 2010 16:46:37 +0000

anon, that is the big hard question.

tom, we already know what a world without insider trading rules looks like; we didn’t have them until the SEC created them.

Robert, if the public disliked current rules, politicians would campaign on platforms of changing them, and be elected.

By: Robert Bloomfield

Robert Bloomfield — Sat, 15 May 2010 19:34:52 +0000

More evidence that we defer to almost-transparently self-serving authorities more often than we like to admit to ourselves.

If by “we” you mean politicians who are lobbied intensively by powerful corporate executives who have more political clout than ever, then you are probably right. But I suspect you are making this a more universal argument about the way people are.

By: Robert Wiblin

Robert Wiblin — Sat, 15 May 2010 04:35:36 +0000

““We talk about shareholder democracy, but what we really mean is activist hedge funds and state-pension-fund democracy,” she said. “There’s really no evidence this is going to benefit long-term diversified investors, which means the rest of us.””

Why on Earth would hedge funds have different interests to other shareholders? Don’t they all want to maximise the net present value of dividend payments?

By: Grant

Grant — Fri, 14 May 2010 22:37:52 +0000

Is there any economic justification for government involvement in corporate management to begin with? It seems to me that private experimentation in different management and ownership agreements would yield the best results here.

By: anon

anon — Fri, 14 May 2010 22:23:46 +0000

Who is ‘we’ here? Regulatory agencies are not eager to admit that they’re vulnerable to capture by the regulated interests, but this doesn’t imply that the general public will fail to acknowledge this as a problem.

By: Jess Riedel

Jess Riedel — Fri, 14 May 2010 21:32:51 +0000

I think Robin Hanson is arguing here “that we defer to almost-transparently self-serving authorities more often than we like to admit to ourselves”, not that proxy access is good or bad.

By: Bill

Bill — Fri, 14 May 2010 20:47:38 +0000

Just goes to show you how much a corporation is not its shareholders, but its management.

Shareholders are WDS, Weak Dumb and Scattered.

And, management likes it that way.

By: anon

anon — Fri, 14 May 2010 20:08:15 +0000

If proxy access is so good for shareholders, why don’t companies commit to it when listing themselves on the stock exchange? After all, well-managed companies should have higher stock prices.

The same issue applies to anti-takeover provisions; if these provisions turn out to be bad for stockholders, companies could easily refrain from adopting them.

By: David C

David C — Fri, 14 May 2010 18:19:42 +0000

Tomasz, if you follow the link labeled "in January" and then follow the link on that blog post, then you'll end up here. The article has a long argument of why increasing shareholder power improves outcomes. The argument relies on both theoretical and empirical evidence.

By: tom

tom — Fri, 14 May 2010 17:20:46 +0000

Before we can be mad about this elitist control over public companies, don’t we have to imagine the future of shareholder activists and state retirement funds, etc…, running things? I’m not worried about hedge funds that are looking for quick profits but I am worrid about a new set of rent seekers. I’m worried that these rent seekers would have a long ugly run before the contradictions became unsurvivable.)

This is the same problem with people trying to kill the teachers’ unions. Who will step into the breach? We may be getting C-level management now, but why do you suspect we’ll end up will B-level rather than D?