First, shareholder power related proposals in American companies are essentially closing the gap in substantive shareholder power that existed between the United States and Europe. In the past fifteen years, shareholders have successfully made proposals in individual American corporations to de-stagger the board, to elect directors by majority instead of plurality vote, to allow shareholders to request special meetings and to allow shareholders to include director nominees on the company’s proxy. In doing so, they managed to break down or reduce some of the most important barriers for meaningful shareholder voice in director elections in Delaware companies—barriers that have been uncommon in Europe. At the same time, several European jurisdictions have gradually softened the rule of at will removal of directors, thus allowing directors a higher degree of protection against removal.

Second, empirical data on the frequency of shareholder proposals (especially shareholder power related proposals) in the United States and Europe are barely comparable. One reason is the significant difference in prevailing stock ownership structures between the United States and continental Europe. Controlling shareholders obviously do not need to take recourse to shareholder proposals. Can empirical studies then still compare the number of initiatives between companies with concentrated and companies with dispersed ownership, or between jurisdictions with different prevailing ownership patterns? Controlling shareholders have large investments at stake and may on that ground take initiatives that, in the absence of a controlling shareholder, small shareholders would take. Should cross-country comparisons control for differences in the number of small shareholders per company? For differences in the number of shares (or voting rights) in free float? Comparing the number of shareholder proposals per company is likely to result in skewed data.

Shareholder Proposals Shaking Up Shareholder Say