Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book analyses the shareholder primacy theory, which argues that shareholders should be the ultimate controllers in firms. It focuses on the nature and types of shareholder activism. It explains the differences between offensive and responsible shareholder activism, as well as how shareholder activism could be beneficial for shareholders in monitoring and disciplining the board and management. The book discusses the legal and governance practices which underlie director primacy theory in the United States. It offers a new approach as to whether the US model could incorporate shareholder activism while simultaneously preserving sufficient independence for directors. The book also focuses on shareholder rights. It highlights the existence of limited participatory rights and the fact that the meaningful exercise of these rights can be problematic.