Research Tilburg Law School

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Recent international research on Shareholder Activism presented at Business Law Seminar

On 31 October, the department of Business Law organized a seminar on Shareholder Activism. The seminar focused on several dimensions of shareholder activism and the position of shareholders in Europe and Asia. During the seminar, three speakers from different parts of the world presented their most recent research on shareholder activism.

During the first presentation, professor Susan Watson from the University of Auckland answered the question whether shareholders can override management decisions of the board in New Zealand, explaining the Att-General v Ririnui case. Using the fundamental principle of limited liability, she clearly stated that the answer to this question is no: the power to manage the company is derived statutorily and shareholders cannot legitimately override this management power.

The second speaker, professor Chao Xi from the Chinese University of Hong Kong, addressed the practice of shareholder voting in China, using a unique hand-collected dataset on the voting resolutions of Chinese listed companies in the 2002-2016 period. One of his conclusions was that state ownership and greater board independence are actually associated with greater shareholder activism in general meetings of shareholders. Also, the stakes of a controlling shareholder are negatively associated with the participation of minority shareholders and their dissent rates.

Finally, assistant professor Anne Lafarre (Tilburg University) addressed sustainability activism of shareholders in annual general meetings in the Netherlands. She focused on sustainability questions posed by different types of shareholders that were retrieved using a keyword categorization framework. She concluded that different types of shareholders, including institutional investors, have become more engaged with sustainability matters over the past years in the Netherlands, and that there are indications that this activism in annual general meetings also leads to increased sustainability performance scores by Dutch listed companies.

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