Shareholders Get a Vote
(c) Copyright 2006 by Gerald Czarnecki - All Rights reserved
The activists shareholder groups have made "majority vote"
election of directors their primary goal. It is not clear
that this will be good for governance, but many boards are
going along with the concept.
According to a recent article in Fortune magazine, companies
including Intel, Dell and United Technologies have adopted
resolutions that enable shareholders to vote directors off
the board. Other companies, such as Hewlett Packard, are
poised to vote on a resolution that requires the
shareholders' majority vote to elect directors. In the
article, entitled "Fixing Corporate Boards", writer Marc
Gunther explains that the resolutions are intended to put
more pressure on the directors to serve as representatives
of the shareholders' interests.
"Once directors know they can be voted of office - not
to mention embarassed - by disgruntled shareholders, it
stands to reason that they will do a better job than they
have in the past of representing the interests of corporate
owners."
http://money.cnn.com/2006/03/0/news/companies/plugg
edin_fortune/index.htm
Critics say that the majority vote rule will hinder boards,
and that it raises a number of complex issues that will
further complicate the existing challenges of compliance and
best practices in governance.
Gerry Czarnecki promotes excellence in leadership through
activities as an author, public speaker & consultant. He
also trains boards of directors in corporate governance best
practices. For leadership books & programs go to
www.the-czar.com; for his business consulting & governance
training visit www.deltennium.com
