Corporate governance in search of the shareholder-manager balance of power

Recent legislation intended to strengthen shareholder power over managers and the Board of Directors ("Board" or "Boards") through legislative measures such as say on pay, compensation clawbacks, and requiring Boards to submit themselves for re-election in the United States ("U.S."), United Kingdom ("U.K."), and Australia has led to the strengthening of blockholder (i.e. investment funds, hedge funds, etc.) power over managers and the rest of the shareholder body. At the same time, these developments also enable managers to act opportunistically and protect their interests by being more accommodating to the demands of blockholders. The formation of such alliances between managers and blockholders can negatively impact the rest of the shareholder body and should therefore be brought to account. This article examines the causes and consequences of these developments, and ways of addressing the resulting issues.