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23 Ga. L. Rev. 97 (1988-1989)
Rule 14a-8, Institutional Shareholder Proposals, and Corporate Democracy

handle is hein.journals/geolr23 and id is 111 raw text is: RULE 14a-8, INSTITUTIONAL
SHAREHOLDER PROPOSALS, AND
CORPORATE DEMOCRACY
Patrick J. Ryan*
I. INTRODUCTION
The fundamental corporate law of the several states provides
that shareholders both elect the directors who manage their corpo-
rations1 and vote to approve certain fundamental corporate trans-
actions, such as mergers.2 In addition, management often will ask
the shareholders to ratify director decisions.3 The proxy solicita-
tion process makes this voting possible in corporations with large
numbers of widely dispersed shareholders. Consequently, the
proxy solicitation process has become a fixture of modern corpo-
rate governance.
* Associate Professor, Rutgers Law School, Camden. BA. 1976, Loyola Marymount Uni-
versity; M.A. 1977, J.D. 1980, Loyola Law School, Los Angeles; LL.M. 1987, Columbia Uni-
versity; Wien Fellow and Associate in Law, 1984-86. This Article was submitted in partial
fulfillment of the requirements for the degrees of Master of Laws and Doctor of the Science
of Law, in the Faculty of Law, Columbia University. I am grateful for the advice and en-
couragement received from Curtis J. Berger, Harvey J. Goldschmid, and John C. Coffee, Jr.,
who serve as my dissertation committee at Columbia. I am also thankful for helpful com-
ments and criticisms from Roger J. Dennis, Jay M. Feinman, J. Nicholas McKeever, Jr.,
Allan R. Stein, and Robert F. Williams. Special thanks are due as well to Anne Dalesandro
and her colleagues on the Rutgers Law Library staff. Part of this research was supported by
a Rutgers University Research Council Summer Fellowship.
I E.g., CA. CORP. CODE § 301 (Supp. 1988); DEL CODE ANN. tit. 8, § 212 (1983). See gener-
ally H. HENN & J. ALEXANDER, LAWS OF CORPORATIONS AND OTmE BusiNEss ENTERP'Ri
490 (3d ed. 1983).
2 E.g., DEL CODE ANN. tit. 8, § 271 (1983 & Supp. 1988) (any sale, lease, or exchange of all
corporate property or assets other than in the usual course of business); N.Y. Bus. CORP.
LAW § 803 (McKinney 1986 & Supp. 1988) (amendments to articles of incorporation); N.Y.
Bus. CORP. LAW § 903(a)(2) (McKinney 1986) (mergers and consolidations); DEL CODE Aim.
tit. 8, § 275 (1983 & Supp. 1988) (nonjudicial dissolution). For a broad discussion of what
constitutes fundamental corporate transactions subject to shareholder approval, see H.
HENN & J. ALEXANDER, supra note 1, at 951-1018.
1 E.g., Point Trap Co. v. Manchester, 98 R.L 49, 199 A.2d 502 (1964) (requiring share-
holder approval of all contracts and other transactions, even though fair to the corporation,
under statute regarding interested officers and directors). See also H. HENN & J. ALEXANDER,
supra note 1, at 570; R. CLARK. CORPORATE LAW 159-89 (1986).

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