Research shows giving shareholders voice improves boards' accountability
It's a maddening quirk of corporate governance that board of directors elections are largely meaningless, with just a single vote for any nominee trumping even a landslide of shareholder opposition.
Two years ago, federal regulators were on the verge of giving shareholders the ability, under very limited circumstances, to nominate and elect their own candidates to boards. But those proposals were derailed by pressure from two prominent lobbies, the Business Roundtable and the Chamber of Commerce, which threatened a lawsuit.
Officially, the matter is still "pending" at the Securities and Exchange Commission. But shareholder activists, dubious the initiative will be revived, are leading the charge on a new front, pushing individual companies to adopt majority voting for all director slots.
Refreshingly, there seems to be some wind in their sails. Most notably, Intel Corp. announced last month it has amended its corporate bylaws to require that candidates for its board must receive a majority of the votes cast to be elected, joining only a few dozen U.S. companies that have such polices.
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