Improving Shareholder Monitoring of Corporate Management by Expanding Statutory Access to Information

Abstract

A central issue in contemporary corporate law is the effectiveness of shareholders as monitors of corporate management. For example, in a series of recent articles, legal scholars have debated whether the rapid growth in the equity ownership positions of institutional investors, the relative stability of their shareholdings in each company, and their increased activism in corporate governance matters, will lead to better monitoring by shareholders and improved corporate performance. However, two predicates to effective shareholder monitoring are that dispersed investors have information about the companies they invest in and that they can communicate this information to other investors so that they can act collectively.