Prof. Julian Franks (London Business School) presents his paper on "Corporate governance through voice and exit" at the "Corporate Governance And Ownership With Diverse Shareholders" conference at IESE Business School, Barcelona. Discussion of the paper is then presented by Prof. Krishna Palepu (Harvard Business School). The full paper and slides from this presentation can be downloaded here: ecgi.global/content/corporate-governance-and-ownership-diverse-shareholders#!event-programme
Directors have traditionally been elected by a plurality of the votes cast. This means that in uncontested elections, a candidate who receives even a single vote is elected. Proponents of “shareholder democracy” have advocated a shift to a majority voting rule in which a candidate must receive a majority of the votes cast to be elected. Over the past decade, they have been successful, and the shift to majority voting has been one of the most popular and successful governance reforms.