An In-Depth Exploration of Board-Shareholder Dialogue
Corporate governance continues to evolve, shaped by the dynamic interplay between institutional investors and corporate boards. Cambridge University Press’s new title, “Board-Shareholder Dialogue: Best Practices, Legal Constraints and Policy Options” edited by Bocconi professor Giovanni Strampelli (Department of Legal Studies) with Luca Enriques of Oxford University, offers a contemporary exploration of this critical relationship. With contributions by leading international scholars, among which Economics Nobel laureate Oliver Hart, the book dives into the many frameworks, practices, and challenges that define board-shareholder interactions today.
The book highlights the growing importance of private dialogues between institutional investors and corporate boards, a trend reshaping the landscape of corporate governance. Such interactions are not just about conveying expectations—they are essential in influencing corporate decisions while ensuring adherence to fiduciary duties and long-term goals.
The authors delve into a range of legal and policy constraints, from insider trading and selective disclosure regulations like the EU’s Market Abuse Regulation to the U.S.’s Regulation FD. The book underscores the importance of safeguards and standardized procedures to navigate these complexities. The volume also examines corporate governance dilemmas such as the roles of CEOs, non-executive directors, and supervisory board members.
The book adds to the foundational debate on the purpose of the corporation. Does it exist solely to maximize shareholder wealth, or does it serve broader community goals? The answer influences how shareholder engagement is framed—whether as a means to ensure shareholder value or as part of a more intricate network of agency relationships aiming to balance diverse stakeholder interests. The volume also considers whether and how retail shareholders and a wider range of stakeholders can be involved in, or initiate, engagement initiatives. Last but not least, it analyses the interaction between ESG activists and asset managers.
