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Reviews recent empirical evidence regarding the special role of banks for the corporate governance of German firms (hausbank-relationships). We differentiate between the role of banks as monitors and financiers of large, exchange-listed firms and of smaller, non-listed firms. Sub-sections of the chapter deal with direct shareholdings, proxy-voting rights, supervisory board representation, debt financing, and distress resolution. The accumulated evidence supports the idea that relationship lending plays a distinctive role in German firms’ corporate governance, and will continue to influence the future development of the financial system.

Although there are plenty of signs that the German model of corporate governance is indeed forced into a transition to a more capital market-oriented one, the remnants of the old modus operandi persist. In portraying the traditional legal foundations of German corporate governance, the present chapter first explores how such archetypal internal structures as the dual board system, mandatory labour codetermination and the specific legal regime for groups of companies are embedded in the fundamental structure of German corporate law.

It then outlines some of the issues that define the ongoing transition process. The basic general thrust of this part is that the traditional corporate governance system, which has long been dominated by a focus on the legal rules determining the inner structures of the corporation, is more and more integrating new elements of an emerging body of capital market laws leaving German stock corporations under the governance of a non-uniform set of rules. Recent developments such as the German takeover law and the German Corporate Governance Code will further strengthen capital market orientation, but the final outcome of this process of modernisation cannot be assessed clearly yet.

This chapter explains historical and systemic sources of institutional activism. Starting from re-examining underlying principles of New Deal financial regulations established in the 1930s that discouraged institutional activism, it argues that they were overturned in the 1980s and 1990s in the name of promoting “shareholder democracy.” It analyzes these misguided regulatory “reforms” including the introduction of compulsory voting by institutional investors, a proxy-voting rule change that greatly facilitated aggregation of proxy votes by predatory value extractors. The chapter argues that those reforms created a large vacuum in corporate voting because, contrary to the ideal of shareholder democracy and particularly with the increasing dominance of index funds, institutional investors had little ability and incentive to vote the shares in their portfolios. The main beneficiaries of these reforms have been the leading proxy advisory firms and a small group of hedge-fund activists intent on looting the business corporation.

This chapter mentions union-influenced pension plans that had the will but not always the way to become shareholder activists. A big problem was the Securities and Exchange Commission (SEC), which historically was a brake on their efforts and multiemployer plans had additional problems. The chapter mentions John Sweeney, who became AFL-CIO (American Federation of Labor and Congress of Industrial Organizations) president and put in place an infrastructure to encourage their activism. The chapter describes union investors that reached out to players in the investing world — the big public plans, Chartered Insurance Institute (CII), and proxy advisors such as ISS. The SEC's proxy voting rules had for years been stacked in management's favor, but in 1989, the California Public Employees' Retirement System (CalPERS) took the lead in challenging the agency, offering nearly fifty separate proposals to loosen up proxy rules.

Non-voting has become a major issue of late as electoral participation has declined in most liberal democracies, not just in France. However, the history of voting demonstrates that this is no new phenomenon and, indeed, the problem of abstention was attracting attention from the inception of mass voting. After 1848 it would become a major preoccupation for French politicians. Proposals were frequently tabled for the vote to be made compulsory, though this would remove the liberty of not voting, while there was always disagreement over how to enforce the obligation. By the turn of the twentieth century, in the light of turnout regularly exceeding 75 per cent of the electorate, in both legislative and municipal elections, such concern might appear exaggerated. Yet the principle of representation was perceived to be at risk when electors failed to vote and there were fears that militant minorities would take control. Despite these persistent demands for compulsion, voting has remained a voluntary act in France and the civic duty to vote has been emphasized instead.

This chapter reveals ethnographically how Naga insurgency, pre-existing political practices and principles, and present-day democratic and electoral politics interrelate in complex and counterintuitive ways. While Naga underground groups formally oppose national elections, in actual practice, national workers intervene and influence election outcomes. More broadly, this chapter explores what ordinary Naga villagers themselves make of modern democracy, and its hallmark of competitive elections, they now have to engage with. To discuss this, the author explores the historical and cultural inferences that guided two crucial episodes that ensued in the run up to Polling Day in Phugwumi. First, the villagers’ (successful) attempt to protect the village electoral list from the deletion of ‘bogus votes’ initiated by the government. Second, the villagers’ (unsuccessful) attempt to agree on a village consensus candidate. The analysis of these events leads the author to critique preconceived definitions of ‘normative democracy’, as Nugent has discussed, and he highlights Naga electors’ agency and imagination to adjust democratic ideals to their own lifeworlds and uses.

This chapter exposes a particularly aggressive species of activist shareholder, hedge-fund activists, who are ready to take advantage of changes in proxy-voting and engagement rules to enhance their value-extracting power and to build private “war chests” that serve to enhance their value-extracting power even more. It examines the evolution and the current state of hedge-fund activism. After explaining this phenomenon’s origin and expansion, it investigates in particular Carl Icahn’s transition from the most representative corporate raider to one of the most “successful” hedge-fund activists in order to delineate vividly the characteristics and methods of the new value-extracting outsiders. It also examines how “co-investments” between hedge-fund activists and institutional investors are carried out.

Chapter 7 examines various forms of engagement with companies to press them to decarbonize. It discusses direct engagement with corporate boards, shareholder proposals, and proxy voting. It examines divestment as an option to advance climate goals. It also discusses why it is important to engage with policy-makers as they design and implement policies to transition domestic economies, and looks at some creative ways in which climate democracy is being enhanced. The chapter then turns to the extensive, emerging litigation against companies and their directors for their failure to manage climate risks. There are lawsuits both in the United States and globally against companies and institutional investors. The chapter also canvasses recent judgments denying licenses and other economic activities harmful to climate mitigation and adaptation.