July 9, 2009
At the present time, shareholders have no say in the election of directors of their companies, nor of the appointment of senior officers. Consequently their only vote is "with their feet", i.e. to sell, at any cost.
Traditionally Boards, in "recommending" their own re-election, claim that the candidates for election or re-election are the best qualified etc. in the country. It is impossible to find a more self-serving or less honest statement in the financial literature. As evidence I point to the financial condition of most of these companies, under the direction of these self-appointed boards. By default, the evidence is clear, there are other equally or better qualified persons available to direct the affairs of America's corporations. Only when there are directors who are prepared to exercise control over their CEOs will the excesses now being revealed be brought under control. Those directors will never be nominated by management or by the current boards, which inevitably support management. Only through rules allowing nomination by shareholders will truely independent directors be selected and elected.
Corporate boards are one of the last strongholds of dictatorship in the world. Even in Iran the Supreme Leader allowed opposition candidates. I urge the SEC to give American shareholders the same rights, the right to nominate and elect directors who will represent their interests.