Taking shareholder's social preferences seriously: confronting a new agency problem

Research output: Contribution to journalArticlepeer-review

Abstract

Oliver Hart, Nobel Laureate in Economics for 2016, and economist Luigi Zingales recently published an article justifying companies’ pursuit of social objectives at the expense of profits from within the shareholder primacy framework. This Article highlights an important consequence of this approach: a new agency problem between managers and shareholders regarding social preferences. This Article provides two possible solutions to this agency problem: a bottom-up solution focused on shareholders’ ability to submit proposals on such issues and a top-down solution based on an independent board sub- committee intended to identify social objectives and forward them for shareholder approval.
Original languageEnglish
Article number6
Pages (from-to)699-730
Number of pages31
JournalUC Irvine Law Review
Volume9
Issue number3
StatePublished - Mar 2019

Fingerprint

Dive into the research topics of 'Taking shareholder's social preferences seriously: confronting a new agency problem'. Together they form a unique fingerprint.

Cite this