02 August 2009
Demanding Boards’ Diligence
In his Op-Ed article in the August 1-2, 2009 Wall Street Journal, “The Schumer Proxy,” Thomas J. Donohue distorts the likely consequence of the Shareholder Bill of Rights. Although union pension funds, hedge funds, and corporate raiders are likely to be the initial beneficiaries of its enlargement of participation in corporate governance, the burden of its provisions will fall heavily on corporate boards, which will no longer be the public relations tools of top management.
Not only would directors have to contend with more and more proxy battles, as activist groups master the art of marshalling one-percent minimum holdings, but they would have to stand for reelection every year, select a chairman from outside management and, who knows, become a professional class of business governors. It sounds like a more “European” system, unlike the typical boom and bust economy of the U.S. that has driven the world into unprecedented wealth in recent years and dashed some of its hopes last September.
In his Op-Ed article in the August 1-2, 2009 Wall Street Journal, “The Schumer Proxy,” Thomas J. Donohue distorts the likely consequence of the Shareholder Bill of Rights. Although union pension funds, hedge funds, and corporate raiders are likely to be the initial beneficiaries of its enlargement of participation in corporate governance, the burden of its provisions will fall heavily on corporate boards, which will no longer be the public relations tools of top management.
Not only would directors have to contend with more and more proxy battles, as activist groups master the art of marshalling one-percent minimum holdings, but they would have to stand for reelection every year, select a chairman from outside management and, who knows, become a professional class of business governors. It sounds like a more “European” system, unlike the typical boom and bust economy of the U.S. that has driven the world into unprecedented wealth in recent years and dashed some of its hopes last September.
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