In an article titled “CEOs Fight Making It Easier For Holders to Stop Board Picks” [$], the WSJ reported:

“… the Business Roundtable is launching a campaign to oppose shareholder proposals that would make it easier for investors to reject nominees for corporate boards.

The Business Roundtable, composed of chief executives of 160 major corporations, is alarmed by proposals requiring nominees to get the affirmative vote of the majority of shares cast. In most corporations today, shareholders can vote for a nominee or withhold a vote, but the nominee is elected as long as a single vote is cast in his or her favor — no matter how many votes are withheld.”

This change seems like a fairly basic democratic principle, does it not? Except to those whose interests are threatened by increased shareholder influence.

Note that the opposition is not from the big firms per se — which, after all, should represent the interests of their stockholders — but from their individual CEOs. But they should have no position on this issue at all. A Chief Executive Officer is an employee, hired by the Board on behalf of the stockholders. If CEOs interject themselves into any aspect of the board election process it means they have forgotten who they work for.

These CEOs have revealed that they fundamentally do not want improved corporate governance. Their Boards should tell them to stick to managing their companies.

[If you're interested in who is behind this, here is a list of the Business Roundtable's current membership.]

Technorati Tags: big business

This entry was posted on Tuesday, May 31st, 2005 at 4:30 am by A Senior Administration Official and is filed under Brilliant, but uncategorizable, How Not To Succeed In Business. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.