| Summary: | 碩士 === 國立中央大學 === 產業經濟研究所 === 98 === After the Asian Financial meltdown, the corporate governance becomes popular topic in the whole world. Proxy contests, the powerful device of the market for corporate control, play the important roles in corporate governance by which shareholders hold management accountable.
According to the OECD Principles of Corporate Governance 2004, the corporate governance should emphasize the rights of shareholders and key ownership functions, especially the rights to participate and vote in general shareholder meetings. As the ownership and control had become separated in the large publicly held corporation, realistically the solicitation of proxies is today the stockholders` meeting. The usage of the proxy plays the key role. As Prof. Loss observed, “Unregulated, it is an open invitation to self-perpetuation and irresponsibility of management. Properly circumscribed, it may well turn out to be the salvation of the modern corporate system.”
The proxy contests usually involved substantial costs. Based on proxy statements filed by outsiders engaged in proxy solicitations during 2003 to 2005, the average cost of a contest was $368,000. The allocation of the substantial costs influences not only how the manager’s use of corporate funds to solicit the proxies, but whether the challengers decide to enter the proxy contest. The corporate law, securities law and the proxy rules in Taiwan do not regulate the issues of the cost allocation. However, according to the effective official explanation, neither the incumbents nor the challengers have the right to use the corporate funds to solicit the proxies when the control contests occur. Such attitude of the explanation is totally different from the courts and state law in United States, and it is the open question in the literature. The thesis not only seeks to introduce the cases, state law and the comment of United States but provide economic analysis of cost allocation. The conclusion provides foundation of the legislation in Taiwan.
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