Proxy Solicitation And Its Legal Regulation

Decentralization and negotiability of shares created the separation of corporate ownership and control in listed corporation. Monitoring corporation managers, thus safeguarding the interests of the shareholders become the core subject of corporate governance. But in reality many of the shareholders of listed corporation is not positive to attend the shareholders' meeting to exercise voting rights because of their rational apathy. Therefore, proxy solicitation could concentrate dispersive voting rights, and then might monitor mangers and improve corporation operation.The real object of proxy solicitation is voting rights. Voting rights have separated from the stock rights and became a neutral tool. Consequently, proxy solicitation turns into a method of corporate control contest. Proxy solicitation could be used for protecting shareholders' interests, but, at the same time, it is also possible that someone who has hostile motive might abuse proxy solicitation for his own benefits. For this reason, most countries and regions have developed proxy rules to regulate use of the proxy.Taiwan region has also developed proxy rales system. This paper will analyze Rule of Using the Proxy to Attend the Shareholders' Meeting of Publicly Held Corporation and classical cases related to proxy solicitation in Taiwan region. Through analysis of both rules and cases, this paper will summarize the legislative intent of proxy rales system and analyze its shortcomings.Finally, this paper will review the objectives of proxy solicitation and Taiwan region proxy rales. And, based on long-term considerations, give advices of amending the rales. Only cooperated with other corporate governance mechanisms, proxy solicitation could be helpful to corporate governance. Not only proxy rales should focus on preventing abuses of proxy, but also should guide proxy function its positivity.