Under the shareholder primacy model, shareholders exercise voting power because their votes are wealth maximizing and efficient. The practice of decoupling, or the strategic separation of the right to vote on a share from the economic ownership of that share, undermines this efficiency. The decoupled investor’s interests are not aligned with maximizing the value of the corporation and decoupled investors have, to the detriment of all other shareholders, used their voting power to dictate inefficient corporate decisions. This Note advocates for proxy card disclosure of decoupled shares and subsequent voiding of the decoupled votes. In this way, only those shares interested in wealth maximization are able to influence corporate outcome, restoring efficiency to shareholder voting.
What We Talk About When We Talk About Voting: Efficiency and the Error in Empty Voting,
21 Fordham J. Corp. & Fin. L. 211
Available at: http://ir.lawnet.fordham.edu/jcfl/vol21/iss1/4