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The global financial crisis highlighted the interconnectedness of international financial markets and the risk of contagion it posed. The crisis also emphasized the importance of supranational regulation and regulatory cooperation to address that risk. Yet, although capital flows are global, securities regulation is not. As a 2019 report by IOSCO notes, the regulatory challenges revealed during the global financial crisis have by no means dissipated over the last decade. Lack of international standards, or differences in the way jurisdictions implement such standards, can often result in regulatory-driven market fragmentation. This article considers a range of cooperative techniques designed to achieve international regulatory harmonization and effective financial market supervision. It includes discussion of a high profile cross-border supervisory experiment, the 2008 US-Australian Mutual Recognition Agreement, which was the first agreement of its kind for the SEC. The article also examines some key regulatory developments in Australia and Asia since the time of the US-Australian Mutual Recognition Agreement.

Shareholder participation in corporate governance and investor activism are topics du jour in the United States and around the world. In the early part of the 20th century, Professors Berle and Means considered that shareholder participation was impossible in the transformed commercial world that they described in The Modern Corporation and Private Property. This was a world characterized by dispersed and vulnerable shareholders, in which owners do not manage, and managers do not own, the corporation. In such an environment, the goal of corporate law became one of protecting shareholder interests rather than providing shareholders with participation rights. The structure of capital markets and profile of shareholders in the United States today is dramatically different from that time. The rise of institutional investors challenged the idea that the only possible paradigm in corporate law is one of shareholder protection. Shareholder participation in corporate governance is not only feasible but a contemporary reality. As this Article demonstrates, however, there are competing narratives about shareholders and their right to participate in corporate governance around the world. Although a negative view underpins much recent debate in the United States, a diametrically opposite view of shareholder power and activism has gained traction in many jurisdictions outside the United States. This Article focuses on one manifestation of this positive view of shareholders, namely shareholder stewardship codes, which originated in the United Kingdom following the 2007–2008 global financial crisis and are now proliferating throughout the world. These competing narratives concerning the role of shareholders in corporate governance have significant regulatory implications. In particular, the narratives pose challenges to regulators, who attempt to differentiate between "good activists" and "bad activists."

ABSTRACTManuscript Type: ConceptualResearch Question/Issue: This article explores the rising tension between shareholder and director power in the common law world. First, the article analyzes key arguments in the shareholder empowerment debate, and current US reform proposals to grant shareholders stronger rights, from a comparative corporate law perspective, examining how traditional US legal rules diverge from other common law jurisdictions. Secondly, the article discusses power shifts in the opposite direction – namely toward the board – in some parts of the common law world. It considers the potential friction between legal rules designed to enhance shareholder power and commercial practices designed to subvert it.Research Findings/Insights: The article shows that US shareholders have traditionally had unusually restricted rights compared to their counterparts in common law jurisdictions, such as the UK and Australia. The article challenges a number of arguments supporting this traditional US approach, by showing that the arguments are often US‐specific, and are less persuasive from a comparative corporate governance perspective. The article also identifies an important tension between legal rules designed to enhance shareholder power and commercial practices designed to subvert it. It shows how the dynamic nature of regulation, and the strategic response of regulated parties, can affect the operation of legal rules.Theoretical/Academic Implications: The article broadens the scope of the US shareholder empowerment debate, by means of a comparative law analysis. It challenges an evolutionary/managerialist theory of US corporate governance, by showing that other jurisdictions have made different choices concerning the allocation of power between shareholders and the board. The article also shows the importance in comparative corporate governance scholarship of focusing not only on the terms of specific laws, but also on the commercial responses of parties subject to those laws.Practitioner/Policy Implications: The article assesses the role of shareholder participation as a regulatory mechanism to enhance corporate governance legitimacy. The global financial crisis has highlighted some of the dangers of untramelled managerial power and under‐regulation. The article provides important regulatory insights to policy makers, concerning the appropriate balance of power between shareholders and the board of directors.