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The Case for Limited Shareholder Voting Rights

University of California, Los Angeles - School of Law

UCLA School of Law, Law-Econ Research Paper No. 06-07
UCLA Law Review, Vol. 53, pp. 601-636, 2006
Recent years have seen a number of efforts to extend the shareholder franchise. These efforts implicate two fundamental issues for corporation law. First, why do shareholders - and only shareholders - have voting rights? Second, why are the voting rights of shareholders so limited? This essay proposes answers for those questions.

As for efforts to expand the limited shareholder voting rights currently provided by corporation law, the essay argues that the director primacy-based system of U.S. corporate governance has served investors and society well. This record of success occurred not in spite of the separation of ownership and control, but because of that separation. Before changing making further changes to the system of corporate law that has worked well for generations, it would be appropriate to give those changes already made time to work their way through the system. To the extent additional change or reform is thought desirable at this point, surely it should be in the nature of minor modifications to the newly adopted rules designed to enhance their performance, or rather than radical and unprecedented shifts in the system of corporate governance that has existed for decades.

Keywords: corporate governance, corporation law, shareholders, voting rights
JEL Classifications: K22
Accepted Paper Series

Suggested Citation
Bainbridge, Stephen M., "The Case for Limited Shareholder Voting Rights" . UCLA Law Review, Vol. 53, pp. 601-636, 2006 Available at SSRN:


Contact Information for STEPHEN M. BAINBRIDGE (Contact Author)

Email address for STEPHEN M. BAINBRIDGE
University of California, Los Angeles - School of Law
405 Hilgard Avenue
Box 951476
Los Angeles , CA 90095-1476
United States
310-206-1599 (Phone)
310-825-6023 (Fax)


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Mar 03, 2006




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