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Empowering small shareholders: a comparison of three instruments

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  • Tsjalle Van Der Burg
  • Aloys Prinz

Abstract

In this paper, three instruments for empowering small, individual shareholders are compared: proxy investing, proxy voting institutions and infomediaries. The working of each instrument is discussed with special emphasis on the problems of information gathering and coalition forming. Subsequently, each instrument is analysed with respect to appropriateness, costs and effectiveness. No instrument turns out to be clearly superior to the others. Although proxy investing is the most popular concept among small (individual) shareholders at present, the long‐run potential of proxy voting institutions and infomediaries may be higher. Since more research could be helpful to establish which of these two options is best, both non‐profit organisations and governments could in the meantime stimulate experiments with proxy voting institutions and infomediaries for small shareholders.

Suggested Citation

  • Tsjalle Van Der Burg & Aloys Prinz, 2006. "Empowering small shareholders: a comparison of three instruments," Corporate Governance: An International Review, Wiley Blackwell, vol. 14(5), pages 406-417, September.
    • Handle: RePEc:bla:corgov:v:14:y:2006:i:5:p:406-417
    DOI: 10.1111/j.1467-8683.2006.00514.x
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    References listed on IDEAS

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    1. Becht, Marco & Bolton, Patrick & Roell, Ailsa, 2003. "Corporate governance and control," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 1, pages 1-109, Elsevier.
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    Cited by:

    1. Darren D. Lee & Jacquelyn E. Humphrey & Karen L. Benson & Jason Y. K. Ahn, 2010. "Socially responsible investment fund performance: the impact of screening intensity," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 50(2), pages 351-370, June.
    2. Walid Cheffi & Sonia Abdennadher, 2019. "Executives’ Behaviour and Innovation in Corporate Governance: The Case of Internet Voting at Shareholders’ General Meetings in French Listed Companies," Journal of Business Ethics, Springer, vol. 156(3), pages 775-798, May.
    3. Aloys Prinz & Tsjalle Burg, 2013. "Public bads and private firms: efficiency and sustainability with different allocations of voting rights," European Journal of Law and Economics, Springer, vol. 36(3), pages 423-445, December.

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