The deconstruction of equity : activist shareholders, decoupled risk, and corporate governance / Wolf-Georg Ringe.
2016
K1338 .R56 2016 (Map It)
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Items
Details
Title
The deconstruction of equity : activist shareholders, decoupled risk, and corporate governance / Wolf-Georg Ringe.
Published
Oxford, United Kingdom : Oxford University Press, 2016.
Call Number
K1338 .R56 2016
Edition
First edition.
ISBN
9780198723035 (hbk.)
0198723032 (hbk.)
0198723032 (hbk.)
Description
xv, 269 pages ; 24 cm
System Control No.
(OCoLC)949851305
Bibliography, etc. Note
Includes bibliographical references (pages 235-263) and index.
Record Appears in
Table of Contents
Preface
v
Table of Cases
xi
Table of Legislation
xiii
I.
Introduction
1
A.
Context
3
B.
Structure
5
II.
Shareholders in Corporate Governance
7
A.
Costs of Voting and Apathy
8
B.
Blockholders
11
C.
Activist Shareholders and Hedge Funds
14
D.
Financial Crisis and Recent Developments
18
E.
Shareholders and Risk-decoupling
22
F.
Conclusion
25
III.
Risk-Decoupling Strategies
27
A.
Negative versus Positive Risk-decoupling
27
B.
Negative Risk-decoupling: More Influence than Risk
28
1.
Category 1: Financial derivatives
28
2.
Category 2: Share lending
36
3.
Category 3: Record-date capture
52
C.
Positive Risk-decoupling: More Risk than Influence
58
1.
Contracts for Difference
59
2.
CfD investments and their abuse
62
3.
Case studies
66
4.
Conclusion
69
D.
Empirical Evidence
70
E.
Related Situations Not Covered in This Book
74
1.
Related risk-decoupling strategies
74
2.
`One share, one vote'
75
3.
Proxy advisors
76
4.
Limited liability
78
F.
Summary
79
IV.
Failure of Traditional Categories of Law
81
A.
Corporate and Securities Law
81
B.
Hedge Fund Regulation
85
V.
Problem Perspectives
87
A.
Outline and Relevance of the Problem
87
B.
Principal-agent Perspective
90
1.
Risk-decoupling and agency costs
91
2.
Possible reduction of agency costs?
98
3.
Objection
101
4.
Implications
103
C.
Information Costs
103
1.
Information and transaction cost theory
103
2.
Risk-decoupling and information costs
107
3.
Summary and implications
110
D.
Corporate Finance
111
1.
Debt versus equity
112
2.
Risk-decoupling between debt and equity
114
3.
Shareholders as residual risk-bearers
115
4.
Implications
116
E.
Market for Corporate Control
118
1.
Harmful market impacts of CfD dealings
118
2.
What is wrong with a general CfD disclosure obligation?
127
3.
CfDs and the market for corporate control
140
VI.
Solutions
143
A.
Doing Nothing
144
1.
Persisting decoupling of voting rights
145
2.
Self-regulation
147
3.
Self-regulation of the hedge fund industry
149
4.
Self-help in securities lending cases
151
5.
Risk-decoupling in existing legal frameworks
152
6.
Conclusion
155
B.
Ban and Restriction
156
1.
Ban on decoupling
156
2.
Difficulties with the record-date problem
160
3.
Conclusion
161
C.
Transparency
162
1.
Transparency as a response to decoupling problems
162
2.
Legislative activity and reactions
167
3.
Costs and critique
173
4.
Key issues of a transparency regime
177
5.
Co-ordination with transparency of short selling
182
6.
concrete proposal: An integrated disclosure system
192
7.
Summary
199
D.
Disenfranchisement
199
1.
general prohibition to vote?
200
2.
Case-by-case regulator's decision
202
3.
Limitations of the approach
205
4.
Summary
206
E.
Fiduciary Duties
207
1.
Fiduciary duties as an established legal instrument
207
2.
Individual disadvantages
208
3.
Conclusion
210
F.
Results, Overview, and Assessment
211
G.
Positive Risk-Decoupling---An Alternative Regulatory Model Targeting CfD Abuse
213
1.
Proposed regulatory structure
213
2.
Reply to criticism
218
3.
Efficiency of enforcement
220
4.
Conclusion
223
VII.
Federal Dimension
225
A.
Admissibility
225
B.
Substantive Desirability
227
C.
Practicability
230
D.
Summary
231
VIII.
Conclusion
233
Bibliography
235
Index
265