Piercing the decision-making sphere : happiness as the key to real shareholder participation

The purpose of this article is to explain why recent corporate governance reforms and initiatives proclaiming to enhance shareholder participation and elevate shareholder rights, do not go far enough. Indeed, it is suggested that corporate governance polices and reform programs, which have emerged across the world in response to a number of high-profile corporate collapses, act to re-emphasise the limited, 'passive' role which individual shareholders have traditionally experienced in public companies. Although increasing the amount information provided to shareholders about corporate decisions and strategies, and providing shareholders with a greater opportunity to participate in annual general meetings, do go some way in 'empowering' shareholders, it is argued that shareholders essentially remain passive observers, rather than becoming active participants. To become active participants, or corporate governance 'insiders " it is argued that corporate law needs to be directed at piercing the 'decision-making sphere' for individual shareholders in public companies. This involves accommodating an active role for shareholders in the actual decision-making processes of the corporation, rather than simply being informed of decisions that are made and being entitled to veto decisions at the annual general meeting. The second part of the article looks specifically at how the 'oppression' or 'unfair prejudice' remedy, the most commonly used shareholder remedy, is capable - if reformulated so that the pursuit of happiness, rather than vague notions of 'fairness' and 'justice' is the central objective of the remedy - of being used to influence a change of culture within public companies directed at facilitating an active participatory role for shareholders.