THE RISE OF THE POLITICAL MODEL OF CORPORATE GOVERNANCE AND CORPORATE-CONTROL

In this Article, Professor Pound proposes a broad model for corporate governance in the post-takeover era. He argues that the takeover mechanism, which was the common method of effecting changes in corporate policy and control in the 1980s, has largely been supplanted by other, more democratic mechanisms. These mechanisms range from formal proxy fights to informal discussions between board members and investors. Professor Pound argues that this evolution reflects the reassertion of a ''political model'' of oversight after a long period of dormancy. Using empirical evidence, he illustrates that this model is preferable to the takeover model as a means of monitoring corporate management. Importantly, he predicts that the political model will prove more sustainable than other current, broad-based reform proposals because it better accords with American principles of democratic governance.