Stake In Company Research Articles

The New German Takeover Act

In spite of the fact that many institutional investors now hold stakes in companies domiciled in Germany, there have been very few rules or traditions regarding takeovers by or between Germany firms, especially hostile ones. This article discusses new rules that are evolving, covering topics such as voluntary versus mandatory offers, management due diligence, special offer conditions, management9s duties, management benefits, delisting, minority rights, and others.

Financial Conflict of Interest: an Unresolved Ethical Frontier

Financial conflict of interest has become one of the most contentious issues in medicine today. Several decades ago studies disclosed that physicians who had investments in medical facilities were referring patients for more tests and procedures than physicians who had no such investments. More recently, physicians who forego expensive tests and treatments for patients have been accused of skimping on care for personal financial gain. Physicians who emphatically tout certain treatments have been criticized for possessing hidden financial ties to the manufacturer of the products. Some physicians engaged in clinical trials have been suspected of enrolling patients who do not strictly conform to the research protocols so that they can collect fees from contract research organizations. And in the aftermath of deaths and complications in gene therapy experiments, some scientists and their institutions have been criticized for possessing a financial stake in companies that are involved in the studies.

Growing pains of the Internet age.

Growing pains of the Internet age.

Shareholder Passivity Reexamined

This article assesses the extent to which the traditional passivity of American shareholders is a result of legal rules and conflicts of interest that discourage shareholder activism, or a result of collective action problems that discourage voting, proxy proposals, and other forms of shareholder activism. I develop a simple model of the decision of a large shareholder whether to vote or launch a proxy campaign. Large shareholders can have significant incentives to vote on an informed basis or launch proxy campaigns, especially for issues that are common across many companies and therefore involve economies of scale. However, they face significant legal impediments to owning large percentage stakes in companies or taking an activist role. These legal obstacles are reinforced by conflicts of interest that affect most major classes of institutional investors.