Agradecimientos:
This research is supported by a research grant from the Dirección General de Universidades de la
Comunidad de Madrid (DGUCMME 2008/00059/002)
Derechos:
Atribución-NoComercial-SinDerivadas 3.0 España
Resumen:
This paper presents an innovative approach to the regulation of self-dealing by controlling
shareholders. Our proposal is grounded on the identification -through the lenses of
economic analysis- of the shortcomings inherent in the existing legal solutions, rThis paper presents an innovative approach to the regulation of self-dealing by controlling
shareholders. Our proposal is grounded on the identification -through the lenses of
economic analysis- of the shortcomings inherent in the existing legal solutions, ranging
from the absolute prohibition of self-dealing, to the prohibition of voting with conflicting
interests, or to the imposition of fairness duties to the majority shareholders.
We present our proposal for an alternative regulation, based on the use of options, in a two
period game between the controlling shareholder, who is able to pursue an identifi ed selfdealing
opportunity, and the minority shareholders, who desire to determine the merits
of this business opportunity. We show that our regulatory proposal is more efficient than
existing regulation in the circumstances of our model. The enhanced efficiency of our proposed regime is mainly due to two novel characteristics
of our approach. First, it takes advantage of the repeated nature of the relationship between
the controller and the corporation. In particular, our proposal implies that obtaining future
private benefits requires limiting current private benefits. By doing this we can provide
at no cost an additional incentive that aligns the interest of the controller with that of
the small shareholders. Second, we allow the controller to determine the level of private
benefits that he will extract in each period and apply an automatic penalty for excessive
levels. By doing this we eliminate both the costs of collective action, and the costs of legal
action that critically affect the outcome of the existing regulatory regimes[+][-]