Lawrence Cunningham on Quality Shareholders

Lawrence Cunningham, research professor of law at George Washington University, joins the Business Scholarship Podcast to discuss his articles The Case for Empowering Quality Shareholders and Ask the Smart Money: Shareholder Votes by a “Majority of the Quality Shareholders”. In these articles, Cunningham examines the unique role that “quality shareholders”—concentrated, long-term investors—can play compared to indexed or transient investors. In considering these three cohorts, he concludes that majority-of-the-minority voting for conflicted corporate transactions is often inadequate to the purpose. As a private-ordering solution to this problem, Cunningham proposes that boards adopt majority-of-the-quality-shareholder voting, as well.