Nell Minow, the editor and co-founder of The Corporate Library, has a way with words. Corporate directors, she once said, “are like sub-atomic particles. They act differently when they are being observed.”
That’s worth considering in the wake of the Dodd-Frank Act. From the say-on-pay requirements to facilitating shareholder proxy access, the financial reform law makes a bet that an involved shareowner base can observe and monitor directors, and consequently change director behavior. Unfortunately, the law also assumes that such reforms are too expensive for smaller public companies, and “allows” (read that as “suggests”) the Securities and Exchange Commission exempt ...