Gretchen Morgenson continues her penetrating assessment of the state of corporate governance with a piece in today's New York Times about the insupportable arguments money managers and corporate officials make to explain their failure to support shareholder proposals to require that directors get majority support from shareholders. Those that do not would be required to resign.
Back in 1991, when Bob Monks and I wrote our first book about Corporate Governance, Power and Accountability, we quoted Edward J. Epstein, who said that shareholder elections "are procedurally much more akin to the elections held by the Communist Party of North Korea than those held in Western democracies." (Who Owns the Corporation? Management vs. Shareholders, Priority Press, New York, 1986, p. 13.) We added, "Except in the rarest of cases, there is only one slate of directors running for office, and management nominates the slate, controls the voting process, and counts the votes. Management has the opportunity to use the company materials to nominate directors; shareholders do not."
See full Article.
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