"Proxy Power" and Corporate Democracy:: The Characteristics and Efficacy of Stockholder‐Initiated Proxy Issues
In: The American journal of economics and sociology, Band 50, Heft 1, S. 1-15
ISSN: 1536-7150
Abstract. Separation of corporate ownership from control has permitted the rise of a self perpetuating managerial elite, which operates businesses in its own self interest. The attempt of the corporate democracy and corporate responsibility movements to curb unbridled management power through stockholder proxy proposals has been highly publicized. Analysis of stockholder initiated resolutions contained in the proxy statements of 626 corporations indicates that relatively few companies receive even one resolution, that proposers are usually small shareholders operating independently or in loose coalitions with limited resources and divergent interests, that managements use massive resources to oppose virtually all proposals and defeat most overwhelmingly, and that the handful of management concessions to stockholder activists is actually cosmetic mollification. We conclude the proxy power is structurally weak and is not a realistic agent of corporate change, in that management structure and policy‐making power remain intact.