How will the proxy exchange release the untapped value in today's corporations?

It all comes back to the agency problem. Economists tell us that board members, managers, and aggregators will not make the personal commitment their roles require unless they get something in return. They are going to pursue, to some extend, their own private agendas. This is what economists call an agency cost.

Does it matter what the private agenda is? Often, in the case of a board member or manager, the private agenda is to secure perquisites out of corporate resources, but other agendas are possible. Is there any real difference between

a board member who acts generally for the financial benefit of shareholders so he can pursue his own agenda of securing perks for himself and

a board member who acts generally for the financial benefit of shareholders so he can pursue his own agenda of ending the exploitation of child labor in third world countries?

Both agents have private agendas that are inconsistent with maximizing shareholder value. Both strive to benefit shareholders so they can retain their positions and continue to pursue their private agendas. Their respective private agendas are agency costs.

The proxy exchange will attract numerous aggregators prepared to work diligently for the benefit of shareholders because they want to pursue their own agendas. They will compete for beneficiaries’ proxy rights based on quality (their perceived ability to maximize shareholder value) and price (the perceived magnitude and nature of their agency costs).

Some aggregators will have private agendas that appeal to shareholders, and they will advertise those agendas. Others will have more selfish agendas, which they will not want to advertise. All aggregators will promote their own ability to make sound decisions for the financial benefit of shareholders. Competition among aggregators will flourish. This will squeeze agency costs, minimizing the ability of aggregators to pursue their private agendas while driving all aggregators to work for the financial benefit of shareholders.

The proxy exchange will be a new market for corporate control—a market more efficient and far less costly than hostile takeovers or traditional proxy fights. Through competition, the proxy exchange will do a better job of minimizing agency costs and maximizing shareholder value than the “self-perpetuating body” of managerial capitalism ever can.