Author : Wolf-Georg Ringe
Publisher : Oxford University Press
ISBN 13 : 0191034533
Total Pages : 272 pages
Book Rating : 4.1/5 (91 download)
Book Synopsis The Deconstruction of Equity by : Wolf-Georg Ringe
Download or read book The Deconstruction of Equity written by Wolf-Georg Ringe and published by Oxford University Press. This book was released on 2016-09-15 with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt: New investment techniques and new types of shareholder activists are shaking up the traditional ways of equity investment that informs much of our present-day corporate law and governance. Savvy investors such as hedge funds are using financial derivatives, securities lending transactions, and related concepts to decouple the financial risk from shares. This leads to a distortion of incentives and has potentially severe consequences for the functioning of corporate governance and of capital markets overall. Taking stock of the different decoupling strategies that have become known over the past several years, this book then provides an evaluation of each from a legal and an economic perspective. Based on several analytical frameworks, the author identifies the elements of equity deconstruction and demonstrates the consequences for shareholders, outside investors, and capital markets. On this basis, the book makes the case for regulatory intervention, based on three different pillars and comprising disclosure, voting right suspension, and ex-post litigation. The book concludes by developing a concrete, comprehensive proposal on how to address the regulatory problem. Overall, this book contributes to the debate about activist investment and the role of shareholders in corporate governance. At the same time it raises a number of important considerations about the role of equity investment more generally.