http://truthonthemarket.com/2006/03/02/survey-on-majority-voting-for-the-election-of-directors/ Academic commentary on law, business, economics and more Wed, 15 Feb 2012 08:05:47 +0000 hourly 1 http://wordpress.com/ http://truthonthemarket.com/2006/03/02/survey-on-majority-voting-for-the-election-of-directors/#comment-5599 Fri, 03 Mar 2006 19:01:59 +0000 http://www.truthonthemarket.com/2006/03/02/survey-on-majority-voting-for-the-election-of-directors/#comment-5599 I will admit that I’m not a fan of social activism in corporate governance. I view it primarily as grandstanding and generally ineffective. Majority vote proposals fall into that category. Even if a director isn’t re-elected, management fills the vacancy on the board, so any real change is unlikely. If institutions don’t like the behavior of management or a board, sell the stock or don’t buy it. If enough investors behave this way and the stock price falls materially, management and the board will notice and take action to bring back the investors. That will effect meaningful change.

]]> http://truthonthemarket.com/2006/03/02/survey-on-majority-voting-for-the-election-of-directors/#comment-5598 Fri, 03 Mar 2006 02:14:56 +0000 http://www.truthonthemarket.com/2006/03/02/survey-on-majority-voting-for-the-election-of-directors/#comment-5598 One practical difference is that under the “real” scenario, a non-incumbent nominee who does not receive a majority of votes cast would not be elected. As for incumbent nominee’s, you make a good point. I suppose that is why the Committee on Corporate Laws is looking at changing the MBCA to eliminate the holdover issue.

]]> http://truthonthemarket.com/2006/03/02/survey-on-majority-voting-for-the-election-of-directors/#comment-5597 Fri, 03 Mar 2006 00:44:11 +0000 http://www.truthonthemarket.com/2006/03/02/survey-on-majority-voting-for-the-election-of-directors/#comment-5597 In the two related posts, you seem to favor “real” majority vote proposals as opposed to any of the variants of the “director resignation” approach. In states with statutory “holdover” provisions, there seems to be little practical difference between the two approaches. So why are you so critical of Pfizer and others who have gone with the director resignation approach. It would seem that in states with holdover provisions a company that proposes a majority vote amendment is also just engaging in a public relations maneuver to satisfy the activists.

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