Opening History’s Shareholder Activism Black Box

Abstract

Shareholder activism is a pivotal element of corporate governance. Historical analysis of shareholder engagement in publicly traded companies has nevertheless generally been cursory. This paper draws upon a hand-collected dataset of proxy contests compiled from newspaper archives to correct matters for the United States for the first half of the 20th century. The dataset reveals shareholder engagement occurred with greater frequency than conventional wisdom implies, particularly in the 1930s and the 1940s. Moreover, the stakes were typically high, with corporate control often being in play by way of contests for directorships. The paper accounts for the trends the proxy contest dataset reveals by reference to applicable corporate law rules and incentives shareholders potentially had to launch proxy contests.