In Conversation with Prof. Umakanth Varottil

Dr. Tom Gosling interviews Umakanth Varottil, Professor of Law at the National University of Singapore. Umakanth discusses his co-authored paper with Prof. Dan Puchniak  (Singapore Management University)
'Climate-Related Shareholder Activism as Corporate Democracy: A Call to Reform “Acting in Concert” Rules' which emphasises the need to reform acting in concert rules to enable collective investor action on climate change. 

The key discussion points are:

• Acting in concert rules were developed to protect minority shareholders in cases where a group of shareholders acts together to seek to take control of a company. 
• These rules have the unintended consequence of inhibiting collective investor action on climate change, particularly in relation to board changes because of fears of triggering mandatory takeover offers or other requirements of the rules.
• As a result, collective engagement on climate tends to be at the softer end of the spectrum, and shareholders are unable to change boards who are not responding appropriately to climate change.
• Acting in concert rules need to be reformed in order to distinguish between activism, where there is a desire to bring about change on a specific topic, and attempts to take control – the former should be possible without triggering acting in concert rules.
• Ideas are discussed for how this could be achieved in practice through use of co-ordinating parties for investors.

We hope you enjoy the conversation. For more interviews in this series, visit this page. 

ECGI Conversations is an interview series aimed at uncovering valuable insights, ideas, and perspectives from cutting-edge academic research. 

Hosted by ECGI Executive Fellow, Dr. Tom Gosling, this series delivers engaging discussions with leading experts in the field.

The ECGI Conversation Series is part of the Responsible Capitalism initiative.