Corporate Disenfranchisement
Key Finding
New policies and regulatory shifts are systematically raising barriers to shareholder proposals, reflecting a broader pattern in which corporate governance evolves to preserve elite control while limiting the real influence of ordinary investors
Abstract
Everything must change to keep everything the same. In 2025, the Business Roundtable launched a campaign to eliminate shareholder proposals and Securities and Exchange Commission (SEC) Chair Paul Atkins declared “de-politicizing shareholder meetings” a top priority. Also in 2025, the SEC withdrew from its gatekeeping function for shareholder proposals under SEC Rule 14a-8; Texas enacted a million-dollar ownership threshold for shareholder proposals; and President Trump issued an executive order calling on the SEC to repeal or amend Rule 14a-8. These are not aberrations. They are paradigmatic responses to perceived empowerment of the everyday person in corporate governance. It is corporate disenfranchisement by design. Shareholder proposals are the miners’ canary of corporate disenfranchisement: when those in power subject participation to deterring requirements and formalities, ordinary shareholders are silenced.
This Article fills a critical gap in corporate governance literature. While fierce debates have sought to establish primacy between directors and shareholders, a quiet but critical paradigm has ensured that dominant interests within the corporate establishment retain power over Corporate America. These theoretical accounts assume that formal structures determine who wields influence. They do not. Formal structure differs from actual power. The paradigm we identify demonstrates how dominant interests adapt to governance changes to retain control over the corporate sector. This capture afflicts any participatory system where formal rights threaten control. The result is the systematic exclusion of ordinary shareholders from meaningful governance participation despite their formal rights.
This Article identifies a pattern recurring across centuries and institutional contexts, tracing the arc of shareholder voice from the robust participatory governance of the East India Company and antebellum American corporations to its post-Civil War decline and the progressive erosion of SEC Rule 14a-8. The paradigm explains how governance models are adapted to entrench power while preserving democratic appearances—the defining mechanism of corporate disenfranchisement.
