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Empowering Firm Owners by Separating Voting from Buying and Selling Shares

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  • Tsjalle van der Burg
  • Aloys Prinz

Abstract

This paper discusses a new system of firm governance. In the system, the responsibility for voting the shares of a firm (“voice”) is given to the people who ultimately provided the money, who, however, have to delegate it to proxy voting institutions. The system helps overcome collective action problems and conflicts of interest within firms, and it reduces the private benefits of control. The disadvantages for firm governance may be relatively modest. However, since the new system of voice is a conceptual innovation, the analysis of its effects is rather tentative. Further research and experimentations are required for firmer conclusions.

Suggested Citation

  • Tsjalle van der Burg & Aloys Prinz, 2010. "Empowering Firm Owners by Separating Voting from Buying and Selling Shares," Review of Social Economy, Taylor & Francis Journals, vol. 68(1), pages 69-91.
    • Handle: RePEc:taf:rsocec:v:68:y:2010:i:1:p:69-91
    DOI: 10.1080/00346760902908708
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    References listed on IDEAS

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    1. Marco Becht & Colin Mayer, 2002. "Corporate control in Europe," Revue d'économie politique, Dalloz, vol. 112(4), pages 471-498.
    2. Barca, Fabrizio & Becht, Marco (ed.), 2001. "The Control of Corporate Europe," OUP Catalogue, Oxford University Press, number 9780199247424.
    3. Albert Breton, 1974. "The economic theory of representative government: A reply," Public Choice, Springer, vol. 20(1), pages 129-133, December.
    4. Marco Becht & Fabrizio Barca, 2001. "The control of corporate Europe," ULB Institutional Repository 2013/13302, ULB -- Universite Libre de Bruxelles.
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    Cited by:

    1. 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.
    2. Hiromi Sakakibara & Shuichi Ishida & Takashi Natori & Nobuaki Minato, 2018. "A Study of a Venture Company’s Control Rights Allocation Model," Asian Social Science, Canadian Center of Science and Education, vol. 14(1), pages 160-160, January.

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