219 Towards stewardship in market for corporate control.

The shared consensus of all perspectives seems to be that a hostile takeover should not be able to result in overturning a social and ecological strategy in pursuit of partial shareholder interests. Meanwhile, the perspectives seem to equally agree that the freedom of share transferability should not be unnecessarily inhibited by extensive protective measures provided for the board. Instead of relying on the board to use measures to protect its social and ecological strategy against a hostile takeover, I argue that the allocation of stewardship responsibilities to shareholders would be a better approach that fits all of the perspectives. By aligning shareholder responsibilities with the duty of the board to encourage durable success, a regime of shareholder stewardship would decouple the transfer of shares from the transfer of self-interested corporate control. In a regime of shareholder stewardship, shareholders with a controlling interest are only able to exercise their governance rights in pursuit of the evidence-based public purpose of the corporation, which includes the need for profitability as well as an alignment with the needs and limits of its environment. Although buyers in a hostile takeover may disagree with the board on the best strategy to achieve such a durable success, their newly acquired corporate control remains aligned with the shared aim of achieving durable success for the corporation as a whole. The shares acquired in the global market for corporate control would therefore still provide buyers with a controlling interest in the general meeting of shareholders and its accompanying rights of governance. However, they can no longer exercise those controlling rights in pursuit of their own partial interests at the expense of other interests involved in the corporation.

By relying on binding responsibilities of shareholder stewardship to prevent unduly overturning a social and ecological strategy in the situation of a hostile takeover, the freedom of share transferability is protected and shareholders maintain their capacity to provide discipline and critical review to the autonomy of the board. Such shareholder stewardship in the global market for corporate control may even enable corporations to increase the resilience of their corporate ecosystem and the larger ecosystems in which it is embedded, through the synergies achieved by merging with other corporations or by splitting off parts of their corporation which decrease its resilience. The threat posed by the market for corporate control to social and ecological corporate strategies therefore builds on and extends the argument for the allocation of binding stewardship responsibilities to shareholders.1 In sum, I propose the following recommendation in relation to the protection against hostile takeovers: