Within less than twenty years the idea of shareholder stewardship has become a global phenomenon. In 2010, the United Kingdom released the world’s first stewardship code to cure what was perceived to be the UK’s primary corporate governance malady: rationally passive institutional investors in a country characterised by a dispersed ownership structure. Today, UK-style stewardship codes exist in 20 jurisdictions, on 6 continents, and are embedded in a panoply of legal systems, shareholder markets, and corporate cultures. This introductory Chapter to the Global Shareholder Stewardship edited book explains why shareholder stewardship around the world is far more complex than the existing literature suggests and how this complexity impacts current theories and existing practices. To explain complexity, the Chapter provides a loose taxonomy of global shareholder stewardship and examines stewardship from multiple perspectives. This complexity, which has largely been overlooked in the literature, creates distinct varieties of stewardship. Based on the distinct varieties of stewardship in jurisdictions around the world, this Chapter concludes by illuminating the challenges and possibilities of global shareholder stewardship. The taxonomy also serves as a useful lens for observing the common themes and points of intersection that make the whole of this Book greater than the sum of its individual Chapters.

UK-style shareholder stewardship is a global legal misfit because it was designed for a jurisdiction with dispersed shareholding where institutional investors collectively control a majority of the shares but has been transplanted into jurisdictions where controlling shareholders predominate. What ought to be the role of shareholder stewardship in a world dominated by controlling shareholders? This chapter analyzes the effectiveness of shareholder stewardship in advancing ESG in controlled jurisdictions then evaluates the effectiveness of the only stewardship code – the Singapore Family Code – to have attempted to reorient UK-style stewardship to a controlling shareholder environment. It concludes that prospects for shareholder stewardship in jurisdictions where controlling shareholders predominate are likely limited. Although a reoriented approach may help nudge controlling shareholders towards ESG, hard law will likely be needed to bring about real change. This suggests that shareholder stewardship may be used as a smokescreen by controlling shareholders and governments, sending a formal signal that they are addressing ESG when functional change is limited in practice.

The provenance of the FCA’s distrust of dual-class stock is the concern that a controller with control over the board of a listed company may use its unadulterated power to cause the company to act in a manner that creates ‘private benefits of control’ (or ‘controller benefits’ as labelled in this book) for the controller to the detriment of public shareholder value.That distrust is demonstrated by the plethora of regulations that notionally blunt the powers of controlling shareholders.However, one share, one vote controlling shareholder firms, such as Fraser Group and Antofagasta, are permitted on the premium tier, and the empirical evidence is inconclusive that they harm public shareholders.With one share, one vote, the controller necessarily has to own a significant portion of the equity to maintain control, constraining the financial incentives to extract controller benefits, and, as a tradeoff against public shareholder expropriation, incentivising monitoring which reduces managerial agency costs.The harsher treatment of dual-class stock stems from a diminishing equity-constraint, with the incentives to extract controller benefits increasing at an accelerating rate as the controller’s equity ownership declines.It is not, though, a fait accompli that controllers will, in fact, use dual-class stock in an invidious manner.

I provide an overview of Singapore, Hong Kong, India and Malaysia, focusing on three areas: (i) the legal powers conferred on shareholders; (ii) the concentrated ownership structure and attendant problems; and (iii) shareholder activism.

I argue that none of the current explanations of why shareholders should be given voting powers are persuasive. I then explain the exercise of informal power through the exertion of influence.

This chapter summarises the key arguments, explains the rationales and importance of this book, and sets out the structure and outline.

This chapter summarises the key arguments, explains the rationales and importance of this book, and sets out the structure and outline.

I argue that none of the current explanations of why shareholders should be given voting powers are persuasive. I then explain the exercise of informal power through the exertion of influence.

I argue that (i) the general meeting is a co-agent of the company and (ii) the company's interests should refer to the long-term value and viability of the company from a normative, legal and empirical perspective.

I argue that controlling shareholders should be subject to fiduciary duties by showing that the legal mechanisms are deficient; there are conflicts of interest involving controllers that remain unaddressed by the law; and the reasons for subjecting directors to duties apply to controllers.

I argue that none of the current explanations of why shareholders should be given voting powers are persuasive. I then explain the exercise of informal power through the exertion of influence.