The False Promise of One Share, One Vote

Hayden, Grant M.; Bodie, Matthew

doi:10.2139/ssrn.1103160

“…How does open voting fare in closely held corporations, when shares may be relatively illiquid and exit is thus difficult? 229 Here, the other characteristics of mass voting are also not present. Voting in closely held corporations is more like voting on a committee, faculty or HOA, face to face, where votes are usually cast openly after motions and debate.…”

Section: Cmentioning

confidence: 89%

“…213 Those borrowers may be acquiring the shares simply for their vote, and thus would be able to vote without having anything meaningful at stake. 214 "Empty voting" by investors who have hedged their positions has been controversial, and it is hard to think of an analogous situation in politics where large voting blocks would cast their votes "insincerely." 215 Unlike a voter or worker, the identity of the beneficial shareholder may not be known, if, as is frequently the case, the owner of record is not the individual investor, but a broker or other nominee.…”

Section: Cmentioning

confidence: 99%

Bentham & Ballots: Tradeoffs between Secrecy and Accountability in How We Vote

Hayward

2009

SSRN Journal

0

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The way a group, jurisdiction, or nation votes, and makes decisions binding on their members and citizens, is fundamental and deceptively prosaic. Why do some groups (faculties, Congress, caucuses, HOAs) take public votes in most contexts, accompanied by debate, sometimes heated? Why do others (electorates, labor unions) take private votes (often by ballot cast in a secure setting where "heated debate" is not allowed) in most contexts? Moreover, what should we make of the exceptions to these general forms? This Article will demonstrate that the hybrid mode of voting-non-debated yet non-secret voting such as in contemporary absentee balloting, in union organizing petitions (so called "card check" campaigns) as well as among corporate shareholderscarries with it the weaknesses of each system without the strengths. Accordingly, where possible the situations that use this hybrid should be reformed to adopt the open or secret modes.

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“…Nowadays, most corporations follow the one-share-one-vote principle and attach one vote to each share. But recent trends are towards more progressive systems in which some shareholders are awarded an oversized share of the voting rights, e.g., dual-class stock (see, e.g., Adams andFerreira 2008, andHayden andBodie 2008). By contrast, in the 19th century, deviations from the one-share-one-vote principle were more regressive.…”

Section: Introductionmentioning

confidence: 99%

Voting in Shareholders Meetings

Bouton

¹

,

Llorente-Saguer

²

,

Macé

³

et al. 2021

SSRN Journal

1

0

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This paper studies the informational e¢ ciency of voting mechanisms in shareholder meetings. When the management cannot a¤ect the proposal being voted on, we show that voting mechanisms are more e¢ cient when their ballot space is richer. Moreover, e¢ ciency requires full divisibility of the votes. When the management has agenda power, we uncover a novel trade-o¤: more e¢ cient mechanisms provide worse incentives to select good proposals. This negative e¤ect can be large enough to wash out the higher voting e¢ ciency of even the most e¢ cient mechanisms.

show abstract

“…Nowadays, most corporations follow the one-share-one-vote principle and attach one vote to each share. But recent trends are towards more progressive systems in which some shareholders are awarded an oversized share of the voting rights, e.g., dual-class stock (see, e.g., Adams andFerreira 2008, andHayden andBodie 2008). By contrast, in the 19th century, deviations from the one-share-one-vote principle were more regressive.…”

Section: Introductionmentioning

confidence: 99%

Voting Rights, Agenda Control and Information Aggregation

Bouton¹,

Llorente-Saguer²,

Macé³

et al. 2021

0

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This paper studies the informational e¢ ciency of voting mechanisms in shareholder meetings. When the management cannot a¤ect the proposal being voted on, we show that voting mechanisms are more e¢ cient when their ballot space is richer. Moreover, e¢ ciency requires full divisibility of the votes. When the management has agenda power, we uncover a novel trade-o¤: more e¢ cient mechanisms provide worse incentives to select good proposals. This negative e¤ect can be large enough to wash out the higher voting e¢ ciency of even the most e¢ cient mechanisms.

show abstract

The False Promise of One Share, One Vote

Abstract: It was as if everyone already knew (from Berle and Means) that the master problem of corporate law was agency costs, and along came an economic model and a vocabulary to elaborate that view.").

Cited by 6 publications

References 9 publications

Bentham & Ballots: Tradeoffs between Secrecy and Accountability in How We Vote

Bentham & Ballots: Tradeoffs between Secrecy and Accountability in How We Vote

Voting in Shareholders Meetings

Voting Rights, Agenda Control and Information Aggregation

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