Einde inhoudsopgave
The Decoupling of Voting and Economic Ownership (IVOR nr. 88) 2012/3.3.1
3.3.1 Informed Voting
mr. M.C. Schouten, datum 01-06-2012
- Datum
01-06-2012
- Auteur
mr. M.C. Schouten
- JCDI
JCDI:ADS598259:1
- Vakgebied(en)
Ondernemingsrecht / Rechtspersonenrecht
Voetnoten
Voetnoten
See Gilson & Kraakman, supra note 6, at 593 (identifying the cost of information as determinant of its distribution). See generally Andrei Shleifer & Robert W. Vishny, Large Shareholders and Corporate Control, 94 J. Pol. Econ. 461 (1986) (discussing incentives of large shareholders).
See Gilson & Kraakman, supra note 6, at 569-70. See generally Sam Peltzman, How Efficient is the Voting Market?, 33 J. L. & Econ. 27 (1990) (analyzing the relationship between informed voting and voting efficiency in the political context).
See Thompson & Edelman, supra note 17, at 132, 150 (arguing that '[s]hareholder voting will satisfy the necessary requirements to gain the information advantage as structured in the Condorcet theorem' and that '[t]he theorem's premise that voters will expend effort to gather information is clearly satisfied by large shareholders who have an economic incentive to gather information'); Kevin A. Kordana & Eric A. Posner, A Positive Theory of Chapter 11, 74 N.Y.U. L. Rev. 161, 168 (1999) (arguing that it is reasonable to assume that the individual creditor votes correctly with probability greater than 0.5 because 'a completely uninformed creditor who flipped a coin would vote correctly with a probability of 0.5, so if a creditor has any information, its probability will exceed 0.5').
The first reason why shareholders are more likely to be right than wrong is that they will generally base their voting decisions on one or more pieces of information. The amount of information that is available will depend on such factors as the stringency of issuer disclosure requirements, analyst following, media coverage, and the ownership structure of the firm, given that large shareholders generally have a greater incentive to gather information.1 It is easy to see that informed voting is a crucial engine of voting efficiency, just as informed trading is a crucial engine of market efficiency.2 But we need to be specific. Informed voting is merely a necessary condition for efficient voting, not a sufficient condition, as scholars who have made prior attempts to study voting efficiency seem to suggest.3 What if shareholders have information but fail to process it rationally? What if they have information that originates from the same source and paints an inaccurate picture? What if they have information but purposely ignore it? As we will see below, the mechanism of informed voting must be complemented by mechanisms addressing these concerns.