Stephen M. Bainbridge, Shareholder Activism in the Obama Era (UCLA Sch. of Law, Law & Econ. Research Paper Series No. 09-14, 2009). Bainbridge, a long-time advocate for traditional director-centered corporate governance, explores the shareholder-empowerment proposals of President Obama and the Democratic Party, which have gained currency in the wake of the 2008 financial crisis. Bainbridge argues that these proposals are not only a threat to the “very foundation of corporate governance” but also potentially harmful to the U.S. economy. Read more...

Stephen M. Bainbridge, The Case for Limited Shareholder Voting Rights, 53 Ucla L. Rev. 601-636 (2006).
Recent efforts to expand shareholder voting rights implicate two fundamental corporate law questions: (1) why shareholders (and only shareholders) have voting rights, and (2) why those rights are so limited. In answering these questions, Professor Bainbridge explores the historical reasons for these rules and argues that such limitations have been crucial to preserving corporate structure and performance. In Bainbridge’s view, “[t]o the extent additional change or reform is thought desirable at this point, surely it should be in the nature of minor modifications to the newly adopted rules designed to enhance their performance.” Read more...

Stephen M. Bainbridge, Director Primacy and Shareholder Disempowerment, 119 Harv. L. Rev. 1735-1758 (2006).
In response to Lucian Bebchuk’s proposals to reform corporate governance in “The Case for Increasing Shareholder Power,” Bainbridge argues that the absence of market examples of shareholder empowerment suggests they are less useful than Bebchuk suggests. Arguing from first principles, Bainbridge makes a case for preserving the present system of limited shareholder voting rights and disputes Bebchuk’s suggestion that shareholders would use his proposals effectively. Read more...

Stephen M. Bainbridge, Executive Compensation: Who Decides?, 83 Tex. L. Rev.1615-1661 (2005). In this review of Lucian Bebchuk and Jesse Fried’s “Pay Without Performance: The Unfulfilled Promise of Executive Compensation,” Stephen Bainbridge argues that Bebchuk and Fried overstate the extent of corporate management’s control over the compensation process. Furthermore, Bainbridge contends, the reforms they propose to corporate governance to combat management’s supposed domination over the compensation process, by promoting shareholder empowerment/activism in corporate governance, are unconvincing. Read more...

Stephen M. Bainbridge, A Comment on the SEC Shareholder Access Proposal (UCLA Sch. of Law, Law & Econ. Research Paper Series No. 03-22, 2003). 
Professor Bainbridge analyzes a 2003 proposed rule that would have empowered shareholders to nominate board directors on corporate proxy statements. Bainbridge outlines the proposal, highlights critical issues, and argues that the likely costs of its implementation would exceed its benefits. Read more...

Stephen M. Bainbridge, Director Primacy: The Means and Ends of Corporate Governance, 97 Nw. U. L. Rev. 547-606 (2003).
Professor Bainbridge argues that director primacy—not shareholder primacy—best solves the central problems of corporate law while operating to maximize shareholder value. Read more...

Stephen M. Bainbridge, The Board of Directors as Nexus of Contracts, 88 Iowa L. Rev. 1-34 (2002).
Bainbridge rejects the two traditional corporate governance models—managerialism and shareholder primacy—for director primacy, in which a company’s board of directors are its true governing body. He also critiques the “connected contracts” theory of Gulati, Klein, and Zolt.
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Lucian A. Bebchuk & Scott Hirst, Private Ordering and the Proxy Access Debate, 65 Bus. Law. 329-359 (2010).
Lucian Bebchuk and Scott Hirst analyze the SEC’s 2009 proposed proxy access rule, which sought to provide shareholders with the ability to place director election nominees on company proxy materials. Read more...

Lucian A. Bebchuk & Robert J. Jackson, Jr., Corporate Political Speech: Who Decides?, 124 Harv. L. Rev. 83-117 (2010).
Lucian Bebchuk and Robert Jackson suggest that since public corporations are allowed to engage in political spending, there needs to be a set of laws and regulations to govern such spending, and they argue that current law inappropriately applies the same rules to govern political spending decisions made by corporate boards as those that govern ordinary business decisions. In the authors’ view, the 2010 Citizens United v FEC decision has highlighted the need for specialized rules for corporate political spending, and this article aims to provide policymakers with a framework for such rules. Read more...

Lucian A. Bebchuk, The Myth of the Shareholder Franchise, 93 Va. L. Rev. 675-732 (2007).
Lucian Bebchuk claims that the “shareholder franchise”—and the notion of shareholders replace underperforming company directors—are largely mythic. Relying on data from 1996-2005, this article argues that challenges to remove directors are uncommon and that successful removal of a director is extremely rare. Bebchuk advances a set of reform proposals intended to empower shareholders to replace company directors, which he contends will improve the performance of corporations and benefit investors and the economy as a whole. Read more...

Lucian A. Bebchuk, Letting Shareholders Set the Rules, 119 Harv. L. Rev. 1784-1813 (2006).
Bebchuk criticizes the longstanding U.S. corporate-law rule that gives boards of directors control over the decision to change the company’s charter or state of incorporation. Bebchuk argues for increased shareholder power to make such decisions, which he contends would improve corporate governance arrangements. Read more..

Lucian A. Bebchuk, The Case for Increasing Shareholder Power, 118 Harv. L. Rev. 833-914 (2005).
Lucian Bebchuk argues that shareholders’ powers to remove and replace directors are insufficient to guarantee the adoption of any proposals that shareholders may want to implement, but that management disfavors. This article proposes an alternative corporate-governance regime intended to increase shareholder power. Read more...

Lucian A. Bebchuk & Jesse M. Fried, Executive Compensation as an Agency Problem, 17 J. Econ. Perspect. 71-92 (2003).
Lucian Babchuk and Jesse Fried suggest that executive compensation can be best explained by looking at managerial power, rather than optimal contracting. The authors propose steps to better align executive compensation with shareholder interests and address what they consider to be an agency problem. Read more...

Yonca Ertimur et al., Board of Directors' Responsiveness to Shareholders: Evidence from Shareholder Proposals, 16 J. Corp. Fin. 53-72 (2010).
This paper looks at directors’ increasing responsiveness to non-binding, majority-vote proposals made by shareholders. By monitoring whether directors follow up on shareholder proposals, this paper explores how corporate managers view and react to the concerns of shareholders, and it asks whether legislative reform is required to increase accountability. Read more...

Larry E. Ribstein, The First Amendment and Corporate Governance (Illinois Pub. Law. Research Paper No. 10-24, 2011).
Citizens United v FEC may have ruled that corporate speech is fully protected under the First Amendment, but regulation of the decision-making processes that sanction such speech remains unclear. This article argues that “protection of shareholders' expressive rights may be trumped by society's interest in hearing corporate speech and the First Amendment's central goal of preventing government censorship.”
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Larry E. Ribstein, Accountability and Responsibility in Corporate Governance, 81 Notre Dame L. Rev. 1431-1493 (2006).
Ribstein argues that debates over corporate social responsibility often overlook available corporate-governance reforms that could promote corporate profitability—making corporate managers more accountable to shareholders while also addressing social goals. Ribstein provides a framework for better assessing claims of corporate social responsibility in a shareholder context. Read more...

Roberta Romano, Less is More: Making Institutional Investor Activism a Valuable Mechanism of Corporate Governance,
18 Yale J. on Reg. 174-251 (2001).
Roberta Romano analyzes existing literature on the role of institutional investors and corporate governance to determine how best to improve corporate governance. Arguing that institutional investor activism is currently ineffective, Professor Romano makes recommendations for reform.
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Vice Chancellor Leo E. Strine, Jr., Toward a True Corporate Republic: A Traditionalist Response to Bebchuk’s Solution for Improving Corporate America, 119 HARV. L. REV. 1759-1783 (2006).
Strine critiques Lucian Bebchuk’s “The Case for Increasing Shareholder Power” and argues instead for a traditionalist approach to corporate law. Read more...