Power to the Shareholders
CEOs and Boards who don't want to be pushed to change by their shareholders, and their apologists, have often trotted out the argument that, if you make it easier to throw out bad CEOs and bad directors, no one will want to serve.
In my view, this argument is completely off-base. There will always be well qualified people capable of serving on boards. There were after Sarbanes-Oxley passed (although we were warned there wouldn't be), and there will be after the SEC green-lights "proxy access" and Schumer's bill passes.
Let's remember, any activist investor who wants to challenge a CEO or board still has to make his or her case. No one is going to get a free pass from other shareholders just for complaining.
There's no question that finally giving shareholders a voice and a real ability to reshape a board will have dramatic ramifications on the way most of these sleepy boards operate. Power to the shareholders!
Position: None.
Originally published in RealMoney.com on 4/27/2009 11:16 AM EDT
To get real-time updates, subscribe to RealMoney.com
