Government meddling in corporate governance in the form of mandatory proxy access may just wind up speeding up the process of businesses moving away fromt the corporate form.
Law professor Larry Ribstein explains:
Moreover, these rules necessarily apply most directly to corporations. How do you regulate proxy access in uncorporations that don’t have boards and don’t have proxies? At some point tinkering with corporate governance will get so expensive that competitive capital markets and creative lawyers will find and exploit contractual alternative. The great thing is that these moves to the uncorporation could increase rather than decrease accountability. All this is laid out in The Rise of the Uncorporation, my book forthcoming from Oxford U Press in a couple of months.
So the headlong move to mess with corporate governance could have some positive effects. Things will fall apart, the centre not hold, and anarchy will be loosed upon the world. I hope.
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