Empowering small shareholders: a comparison of three instruments

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. Copyright (c) 2006 The Authors; Journal compilation (c) 2006 Blackwell Publishing Ltd.

Does Ownership Type Matter for Corporate Social Responsibility?

“…Bollen (2007) establishes that some investors are ethically motivated. Most individual investors will be using much less information given the relatively large cost of information production and processing in relation to their limited portfolio size and risk capacity (De Bondt, 1998; Van der Burg & Prinz, 2006). As such, the individual investors are likely to be unable to arrive at optimal portfolios (Barber & Odean, 2000).…”

L'adoption du vote par internet aux assemblées générales des actionnaires de sociétés cotées en France : une perspective institutionnaliste

“…Il est également judicieux de réaliser des comparaisons avec d'autres pays 19 , en particulier concernant le rôle que peuvent jouer les prestataires de gestion de vote (proxy voting providers) dans l'institutionnalisation du VI en France. Comme aux Etats-Unis et en Allemagne à la fin des années quatre-vingt-dix (Latham, 2000 ;Lattemann, 2005 ;Van der Burg et Prinz ;, les activités de ces prestataires se développent de manière soutenue depuis quelques années en France. Nous estimons que le développement de ces entités, soutenu par un encadrement technico-juridique des conditions d'exercice de leurs activités, contribuera à l'intégration du système de VI en AGA et in fine à le démocratiser.…”

“…Compte tenu de la crise financière et de gouvernance à l'échelle nationale et internationale, il importe d'étudier en profondeur l'adoption de cette NTIC, qui est censée contribuer à l'amélioration des modes de gouvernance (ex. : Lattemann, 2005 ; Van der Burg et Prinz, 2006). Ceci est l'esprit même de la loi et du décret l'ayant autorisée.…”

Changing the world through shareholder activism?

“…In order for a collective shareholder campaign to work, it should also be noted that it is not only necessary that all of the investors in this collective be persuaded to feel sympathetic to the initiating investor's social cause, but they also need to vote on exactly the same resolutions and in a similar way. As some writers suggest, this need for organisation on the part of the initiating investor may in itself make proposing and voting on resolutions a difficult way of influencing corporate behaviour (Powers 1971;van der Burg & Prinz 2006). 8 The alternative route is of course to focus on institutional investors rather than on individual such, or that institutional investors themselves should become shareholder activists.…”

“…While investors may be in a better situation than non-investors when it comes to having access to information about the companies they have invested in, then, it is often extremely timeconsuming and costly to actually get a hold of this information (cf. Charkham & Simpson 1999;van der Burg & Prinz 2006;Webb et al 2003).…”