Is the problem that shareholders are too weak or too powerful? The Defining Tension notes the competing views:
Both the Turner Review and the Maas Committee agree that excessive risk-taking has been one of the causes. But they seem to have different views on the relation between shareholder influence and excessive risk-taking. According to the Turner Review, there were many cases where “boards failed adequately to identify and constrain excessive risk taking,” while “shareholder influence seems to have been relatively ineffective in the past in constraining risky strategies.” (In similar vein, the introduction of the US Shareholder Bill of Rights Act states that boards have failed "to appropriately analyze and oversee enterprise risk" and that "a key contributing factor to such failure was the lack of accountability of boards to their ultimate owners, the shareholders.") From this point of view, shareholder influence is a solution to the problem.
4. By contrast, according to the Maas Committee, a
“disproportionate increase in the power of shareholders (…), whereby the shareholders (who usually have a short-term focus) impeded a sustainable, long-term focus in business strategy of banks. This resulted in increasing attention being paid to short-term profit development, which therefore weakened longer-term risk management.
From this point of view, shareholder influence is the problem.
Whether shareholder influence was a causal factor in the financial crisis, I'm reasonably confident that increasing shareholder power will not be helpful in preventing future crises, but rather would compound them.
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