The Meaningful Return Of Shareholder Access

Law360, New York (November 12, 2014, 4:35 PM EST) -- Directors are not chosen by shareholders. In the case of most public companies, shareholders can only vote for a single slate of directors in something that resembles an old-style Soviet election. The decision as to who gets to serve on the board, therefore, is made not when shareholders vote but when the slate submitted to shareholders is selected. The slate is invariably determined by the board, with input (explicit or implicit) from the CEO. (For a discussion of this influence, see The Demythification of the Board of Directors). The result is a system whereby directors seeking to remain on the board have greater incentive to side with management than with shareholders....

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