What should corporate directors do when shareholders knock on their door this proxy season and ask to discuss, face to face, how they execute their job of overseeing management?
While there are no regulations that require boards to communicate directly with investors, all indications are that pressure on directors to meet with major investors is increasing.
For years, corporate boards operated under the principal-agent theory of corporate governance in which there was a cozy relationship between the board and executive management. Over the past several years, there has been a shift towards a more shareholder-centric model of governance, where the board is expected to provide greater oversight of management with the interests of shareholders in mind. Indeed, shareholders have played a much larger part in shaping such critical areas as board composition,... To get the full story, subscribe now.
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