They also shine a light on the secret finances of more than 300 other public officials such as government ministers, judges, mayors and military generals in more than 90 countries. In the longer term, other responses may be needed we briefly discuss possible strategies focused on voting rights, voting architecture, and supply and demand forces in the markets on which the new vote buying relies.They expose the secret offshore affairs of 35 world leaders, including current and former presidents, prime ministers and heads of state. Our disclosure proposal would simplify and partially integrate five existing, inconsistent share-ownership disclosure regimes, and is worth considering independent of its value with respect to decoupling. We also propose a near-term disclosure-based response and sketch longer-term regulatory possibilities. We discuss the implications of decoupling for control contests and other forms of shareholder oversight, and the circumstances in which decoupling could be beneficial or harmful to corporate governance. We propose a taxonomy of the new vote buying that unpacks its functional elements. This article analyzes the new vote buying and its corporate governance implications. ![]() Corporate insiders, too, can use new vote buying techniques. We call this "hidden (morphable) ownership" because under current disclosure rules, the economic ownership and (de facto) voting ownership are often not disclosed. Sometimes hedge funds hold more economic ownership than votes, though often with "morphable" voting rights- the de facto ability to acquire the votes if needed. In the extreme situation of negative economic ownership, the empty voter has an incentive to vote in ways that reduce the company's share price. Sometimes they hold more votes than economic ownership, a pattern we call "empty voting." That is, they may have substantial voting power while having limited, zero, or even negative economic ownership. Hedge funds, sophisticated and largely unfettered by legal rules or conflicts of interest, have been especially aggressive in decoupling. This decoupling- which we call "the new vote buying"-is often hidden from public view and is largely untouched by current law and regulation. Both outside investors and corporate insiders can now readily decouple economic ownership of shares from voting rights to those shares. In the past few years, the derivatives revolution, hedge fund growth, and other capital market developments have come to threaten this familiar pattern throughout the world. Even so, mechanisms rooted in the shareholder vote, including proxy fights and takeover bids, constrain managers from straying too far from the goal of shareholder wealth maximization. Berle-Means' "separation of ownership and control" suggests that shareholders face large collective action problems in overseeing managers. This structure gives shareholders economic incentives to exercise their voting power well and helps to legitimate managers' exercise of authority over property the managers do not own. Most American publicly held corporations have a one-share, one-vote structure, in which voting power is proportional to economic ownership.
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