Battling for corporate America "Special report

Citation

(2006), "Battling for corporate America "Special report", Strategic Direction, Vol. 22 No. 9. https://doi.org/10.1108/sd.2006.05622iad.004

Battling for corporate America "Special report"

Battling for corporate America “Special report”

The Economist, March 11 2006, Vol. 378 No. 8468, Start Page: 75, No. of pages: 3

Purpose – To report on how shareholder activists are aiming to gain more power over corporate executives. Design/methodology/approach – Examines whether the power of corporate executives is being undermined by shareholder activists in the USA; illustrates with corporate examples. Reveals how younger hedge-fund mangers are getting in on the act and are attempting to get their people on corporate board with help from top lawyers and investment banks; provides examples. Refers to the positions taken by the Securities and Exchange Commission; puts forward how issues such as excessive financial remuneration and weak corporate-governance is putting pressure on chief executives; describes how they are fighting back. Investigates how much power shareholders have in practice; suggests very little; looks at the reasons why most main boards remain stuffed with the “creatures of the chief executives”; records the small number of contested board elections (1996-2004). Spells out how shareholder activists are aiming to change the rules and to win the vote for majority voting; puts forward how the legal profession is split with regard to whether increased shareholder power is a good, or bad thing; presents the two sides of the argument; concludes that more shareholder democracy would “not bring America to its knees” and may even be a step forward. Originality/value – Homes in on the growing unrest among shareholder activists, eager to gain power over corporate executives.ISSN: 0013-0613Reference: 35AJ187

Keywords: Chief executives, Corporate governance, Directors, Shareholders, United States of America