The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Fri, 24 Apr 2026 11:32:37 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Standing Up for the Retail Investor – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Standing Up for the Retail Investor https://corpgov.law.harvard.edu/2018/06/10/standing-up-for-the-retail-investor/?utm_source=rss&utm_medium=rss&utm_campaign=standing-up-for-the-retail-investor https://corpgov.law.harvard.edu/2018/06/10/standing-up-for-the-retail-investor/#comments Sun, 10 Jun 2018 14:22:29 +0000 https://corpgov.law.harvard.edu/?p=107734?d=20180611110932EDT Posted by George David Banks and Bernard Sharfman, Main Street Investors Coalition, on Sunday, June 10, 2018
Editor's Note:

George David Banks is Executive Director of Main Street Investors Coalition and Professor Bernard Sharfman is Chairman of the Advisory Council.

Related research from the Program on Corporate Governance includes The Agency Problems of Institutional Investors by Lucian Bebchuk, Alma Cohen, and Scott Hirst; Social Responsibility Resolutions by Scott Hirst (discussed on the Forum here); and In Search of Absentee Shareholders by Kobi Kastiel and Yaron Nili (discussed on the Forum here).

A new shareholder advocacy group has been formed, the Main Street Investors Coalition. The Coalition aims to mitigate the adverse effects created by the concentration of shareholder voting power that now resides in the hands of mutual fund advisors. This concentration has developed because of the growing popularity of index mutual funds and the industry practice of delegating shareholder voting rights to their advisors.

Shareholder voting, when it is done with the intent of maximizing the wealth of all shareholders, is an important component of efficient corporate governance. According to the Delaware Supreme Court, “[w]hat legitimizes the stockholder vote as a decision-making mechanism is the premise that stockholders with economic ownership are expressing their collective view as to whether a particular course of action serves the corporate goal of stockholder wealth maximization.”

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