The Securities and Exchange Commission and the shareholder proposal rule: Agency administration, corporate influence, and shareholder power, 1942--1998

This dissertation examined the political and administrative forces that influenced the level of shareholder democracy in the SEC's shareholder proposal rule through time. The Securities and Exchange Commission created the rule in 1942, and it gave shareholders the ability to introduce proposals at corporate shareholder meetings. The rule required corporations include shareholder proposals in their proxy statements sent to all stockholders. My research examined the reasons why the SEC amended or altered the rule, and whether the SEC commissioners and staff or corporations were primarily responsible for these changes.; Political scientists have debated whether government institutions or corporations and their groups have more influence over policy-making. This dissertation contributed to that debate by examining a policy designed to empower people. I hypothesized that commissioners' ideologies and staff administration would have more influence over why the rule was weakened or strengthened at various times than corporate influence. This was largely true for the first 40 years of the shareholder proposal rule, but less so after that. The commissioners' ideologies did affect the level of shareholder democracy, but senior staff in the Division of Corporation Finance influenced the amount of shareholder democracy to a greater extent than was anticipated. This was not primarily for reasons related to efficiency in administering the rule, but due to ideology.; Since some staff and commissioners supported higher levels of shareholder democracy than others, this finding suggests that liberal government was not responsible for weakening shareholder power. In spite of the shareholder proposal rule being on the margin of the agency's mission, the SEC as an institution did not oppose shareholder empowerment. It was the differing beliefs in the level of democracy shareholders should be afforded that had the most impact.; Corporate influence helped weaken the rule at various times, but only did so to a limited extent and relied on sympathetic staff and commissioners. Shareholder power was relatively weak during the first three decades of the rule, but as social and institutional investors began to submit proposals shareholder power grew to exceed corporate power. By the late 1990s shareholders had acquired significant influence over agency administration.