In the vivid imagination of Delaware courts, the shareholder franchise is “the ideological underpinning” upon which corporate power rests. A corporate election to choose who should lead the firm is corporate democracy at work since such elections give shareholders the power “to turn the board out.” However, in reality, the vast majority of corporate elections are ho-hum affairs. The current board members are reelected without contest. Annual corporate meetings to hold the elections are dull—held in front of tame audiences in quiet auditoriums. Election outcomes are predictable. Rarely is there a contested corporate election in which the incumbent directors face a challenge for their board seats. Even these affairs, while more interesting, are still as predictable. The incumbents always have the upper hand. The corporate election system is, as a consequence, broken, anticompetitive, and in need of significant reform.
Yet, as this Article shows, previous proposals have overlooked the “genius” of the public sector. In particular, in political elections, campaign reformers have already offered a good answer for how to create competitive elections: Make campaign subsidies available to challengers. This solution works even though the contestants’ campaign costs are high, voters are apathetic and dispersed widely, and incumbents have a natural, built-in advantage. Most notably, for instance, in federal elections, the system of public subsidies for eligible presidential campaigns, the Presidential Campaign Fund, provides a remarkably sturdy roadmap for how to reform corporate elections and create a subsidy system for shareholder challenges to the board of directors.