SSHRC grant to explore shareholder democracy

Christopher NichollsA new Social Sciences and Humanities Research Council (SSHRC) Insight Grant awarded to Professor Christopher Nicholls as co-applicant, will fund research into shareholder activism and its impact on the capital markets.

The grant, in the amount of $155,305 over five years, will fund the project “Shareholder Democracy in Public Corporations – An Empirical and Economic Analysis” which will analyze shareholder activism as an element of corporate decision and policymaking.

Nicholls, the W. Geoff Beattie Chair in Corporate Law at Western Law, has been studying the recent surge in shareholder activism.

As a Visiting Professor of Law at the Harvard Law School in the fall of 2016, Nicholls co-taught a course in Comparative Corporate Law, Finance and Governance while undertaking research on important recent trends in corporate governance, including the impact of shareholder activists.

“Shareholder activism is on the rise in Canada and elsewhere,” Nicholls notes. “This new wave of activism is challenging and refining our views about the appropriate relationship between corporate shareholders and managers. Our research asks the question ‘Is shareholder democracy an unqualified good?’ or, can important tools of accountability ever lead to costly interference with effective, long-term corporate decision-making?”

Nicholls says they want to learn more about the specifics of shareholder activist campaigns, the people and institutions involved, the differing types of activist campaigns, and the effectiveness of those campaigns. He hopes the findings of the study will facilitate more informed law reforms going forward.

“Our research should provide a valuable resource to public policy makers who want to pursue thoughtful, evidence-based reforms. We hope it will also be useful to other financial market participants including, of course, shareholders of publicly-traded companies,” he says.

Nicholls’ SSHRC-funded research will be undertaken along with Principal Investigator, Mohamed Khimji, a former Western colleague and now Associate Professor and David Allgood Professor at the Queen’s University Faculty of Law.

“This project continues Western Law’s tradition of influential research in corporate law,” says Dean Erika Chamberlain. “Professor Nicholls’s work will provide critical data and insight to law-makers and other corporate stakeholders.”