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hareholders might intervene and seek the replacement of directors.10 This articlefocuses on the last of these and explores the possible avenues that might be open to shareholders of
public companies if they seek to intervene. This intervention is often based on the fact that theshareholders are the residual claimants in that they will benefit if the company's fortunes increase, but
they will lose out if the company hits hard times (with their claims being last in line if the company is
liquidated), and in their capacity as residual claimants they have the greatest stake in the outcome ofthe company.11 From a pragmatic viewpoint it might be argued that shareholder initiatives caninfluence the direction of companies with less cost and turmoil than that which often accompaniestakeovers. Much of the literature on the subject assesses whether disciplining affects performance.12However, the purpose of this article is to examine critically the options that are available toshareholders in public companies (the options for shareholders inprivate companies are often going
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to be different, and certainly involve different considerations) if they believe that one or more directorsare performing poorly, and to assess which of these options, if any, are effective in bringing about the
disciplining of directors. The article argues that shareholders are effectively impaired in discipliningdirectors because of both practical and legal reasons, and may well constitute the reason why it
appears little disciplining by shareholders actually occurs.

1. B. Hannigan, Company Law (London: LexisNexis, 2003), p.203; Company Law Review Steering Group, The Strategic Framework (1999),
para.5.1.12; S. Bainbridge, “In Defense of the Shareholder Wealth Maximization Norm: A Reply to Professor Green” (1993) 50
Washington and Lee Law Review 1423; M. Roe, “The Shareholder Wealth Maximization Norm and Industrial Organization” (2001) U. Pa.
L. Rev. 2063; W. Allen, J. Jacobs and L. Strine, “The Great Takeover Debate: A Mediation on Bridging the Conceptual Divide” (2002) 69
U. Chi. L. Rev. 1067 at p.1075.
2. Hutton v West Cork Railway Co (1883) 23 Ch. D. 654; Gaiman v National Association for Mental Health [1971] Ch. 317; Brady v Brady
(1987) 3 B.C.C. 535, CA.
3. It is debatable whether, in strict legal terms, the shareholders are to be regarded as the owners of the company. See, e.g. M. Lipton and
S. Rosenblum, “A New System of Corporate Governance: The Quinquenial Election of Directors” (1991) 58 U. Chi. L. Rev. 187 at p.195;
P. Ireland, “Capitalism without the capitalist: The joint stock company share and the emergence of the modern doctrine of separate
corporate personality” (1996) 17 Legal History 40; S. Worthington, “Shares and shareholders: property, power and entitlement” (Part 1)
(2001) 22 Co. Law. 258 and Part 2 (2001) 22 Co. Law. 307. Also, see Short v Treasury Commissioners [1948] 1 K.B. 116 at 122, where
Evershed L.J. denied the fact that shareholders were the owners of a company.
4. Lipton and Rosenblum, above fn.3, p.187.
5. This is based on a large number of works, but arguably the most influential are: M. Jensen and W. Meckling, “Theory of the Firm:
Managerial Behavior, Agency Costs and Ownership Structure” (1976) 3 Journal of Financial Economics 305; E. Fama, “Agency Problems
and the Theory of the Firm” (1980) 88 J. Pol. Econ. 288; E. Fama and M. Jensen, “Separation of Ownership a本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。