Shareholder Proposal Settlements and the Private Ordering of Public Elections

Sarah C. Haan, Shareholder Proposal Settlements and the Private Ordering of Public Elections

… As a form of private electoral regulation, the proposal settlement mechanism raises issues of democratic transparency, participation, accountability, and enforcement. This Article challenges the characterization of proposal settlements as “voluntary” corporate self-regulation, provides a framework for understanding settlement-related agency costs, and shows how settlement subverts the traditional justifications for the shareholder proposal itself. Solutions that address the democratic and corporate governance problems of settlement largely overlap, suggesting a path forward.