The article in the first url below reports a recent SEC rule change that reflects the growing powers the U.S. regulatory authorities are willing to grant to firm owners (shareholders) over managers. This rule, in particular, allows a greater say for shareholders in terms of CEO succession. The reforms:
“… will force companies to provide more information on the pay of executives and the background of boards. The decisions underscore a regulatory agenda by the SEC's new management, led by the chairman Mary Schapiro, that is increasingly moving towards empowering shareholders.”
The article in the second url below reports that the country often cited as most progressive on shareholder rights is the UK:
“The reason is that, unlike in the United States, British takeover law essentially handcuffs the board of a target company from doing anything to block a deal. No poison pills. No staggered boards. No changing the shareholder vote date. The potential for a C.E.O. or entrenched board to block a deal -- or otherwise act in its own self- interest -- is virtually nil. In other words, England is as close as any country gets to a true shareholder democracy. Any bid gets put to a vote, and all the board can do is offer an opinion.”
Although often championed by CSR advocates, however, this article makes a compelling argument that greater shareholder rights do not necessarily lead to optimal stakeholder outcomes:
“If the board lacks power to weigh in on the deal, that also means nobody with any clout is looking out for other stakeholders, like employees. Most mergers never live up to their hype, resulting in lower values and fewer jobs. So the question worth asking is: Shouldn't someone be looking further into the future?”
Take care
David
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/
Activist targets CEO succession
By Francesco Guerrera and Joanna Chung in New York
434 words
18 December 2009
Financial Times
Asia Ed1
15
http://www.ft.com/cms/s/0/184ef728-eb4e-11de-bc99-00144feab49a.html
or
http://uk.finance.yahoo.com/news/activist-targets-ceo-succession-ftimes-6cb070848b0b.html
Do Stockholders Really Know What's Best?
By ANDREW ROSS SORKIN
975 words
17 November 2009
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2009/11/17/business/17sorkin.html
