Monday, June 21, 2010

Don’t Gut Proxy Access - DealBook Blog -

I could not agree more!!! Great article by Harvard's Lucian Bebchuk.

Short version: strengthen corporate governance practices even though management may not want you to!

Another View: Don’t Gut Proxy Access - DealBook Blog -
"While shareholder power to elect new directors is supposed to serve as a foundation for our system of corporate governance, American shareholders seeking to replace incumbent directors face considerable legal impediments. Lowering these impediments would make directors more focused on shareholder interests. The case for doing so is supported by empirical evidence indicating that arrangements increasing directors’ insulation from removal are associated with lower company value and worse performance.

Any reform of corporate elections should include ending incumbents’ monopoly over the corporate ballot — the proxy card sent by the company at its expense to all shareholders. Only board-nominated candidates get to appear on this ballot; challengers must bear the costs of sending (and getting back) their own proxy card to shareholders. Providing shareholders with proxy access — the right to place candidates on the ballot — would contribute to leveling the playing field."

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