September 29, 2007I oppose the current proposal to further diminish shareholders right in America, and urge the SEC and Congress to join me
opposing S7-16-07. As the world economy evolves further toward global integration, I feel the current system of Corporate Governance at the CEO and Board of Directors level threatens the long-term prospects of the US Economy. The current focus of US Corporations is driven by Wall Street's obsession with driving up stock prices, rather than maximizing shareholder wealth through the investment in future growth. The focus of US Corporations and SEC reporting should shift from a quarterly basis, to an annual basis, with greater emphasis on a company's five year and ten year projections and performance.
Unfortunately, our current system follows the alternative golden rule: "He who has the gold rules." As CEOs elect and control Boards of Directors, the emphasis has been on gorging the American shareholder through the gifting of exorbitant stock options, which further incentivizes those controlling corporations to pump up their stock price, rather than focus on future prospects.
The shareholders of America need further checks and balances by expanding the ability to submit proxy recommendations, and especially the power to elect Directors of Corporate Boardrooms. Then, perhaps, the Boards will better represent the true ownership of Corporations, the Shareholders, rather than continuing in our current path of Board-Level self-enrichment.
In the 21st Century, the US has more global competition than ever before. And unless US Corporations move away from the quarterly based obsession to a longer-term focus, I fear the days of the great US Economy will be under further pressure. And one day, future generations may reflect on the opportunity to change the course of US Economic policy, and wonder how the US lost the position as the #1 economic power in the World.
Matt Stayner, Loyola Marymount University MBA Student