A Plumber's View - Voting Intermediated Shares
Introduction “The existing system of shareholder voting is crude, imprecise, and fragile. Gil Sparks, a leading Delaware lawyer, estimates that, in a contest that is closer than 55 to 45%, there is no verifiable answer to the question ‘who won?’” [1] That system, explicated by Kahan and Rock in 2008, is largely the same system employed today. This post updates the seminal work of Kahan and Rock, from whom the quote came, by (1) briefly reviewing how shareholder voting in the United States is crude, imprecise, and fragile, [2] (2) comparing the U.S. system to other shareholder voting systems around the world to highlight practices that are more precise and robust, (3) discussing technology that can increase the certainty and validity of shareholder votes, and (4) suggesting regulatory reforms that might alleviate some voting problems. U.S. Proxy Voting This section reviews how shareholder voting in the United States is dysfunctional. It starts by presenting background...