Financial reformers try to redefine what it is to be a shareholder
NEW regulations are emerging from Congress in response to the meltdown in the financial industry. Yet their impact, likely to be felt by every public company in America, may weaken rather than strengthen corporate governance.
It was the glaring weaknesses exposed in the boards of Wall Street giants such as Citigroup and Lehman Brothers that prompted some in Congress to propose making it easier for shareholders to nominate candidates for election as directors—something that had hitherto been costly and time-consuming. CalPERS, a big Californian pension fund, is said to have been recruiting a bench of candidates in expectation of a sharp increase in contested elections.
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