Introduction to 2008 Proxy Season Hot Topic

Proxy Season 2008

Introduced February 2008

Over the past 40 years, much has changed in the American Society.  Think of the critical year 1968 – a cultural revolution took place, many of us will agree, and for many institutions, life would never be the same as in “the good old days of top-down, autocratic rule.”  The Old Order was challenged by the New as the [now] elders of the Baby Boom generation (born after 1946 and in their late-teens and early 20s in 1968) demanded their say.  They stormed the college CEOs office, disrupted the Democratic Party convention in Chicago, burned draft cards, shredded military uniforms and awards (as disillusioned draftees returned from Vietnam), demanded equal rights (if female), and during the ongoing Civil Rights struggles mounted serious challenges to the political status quo everywhere in the American Society.

Greater democracy, or at least greater public participation and say-so in decision-making and less autocratic rule, we could claim, were among the changes that had come to:

(1) government at all levels; the political process; elections;

(2) colleges and universities (which abandoned in locus parentis wholesale);

(3) the military, to a large degree (as the young officers returning from Southeast Asia including  Colin Powell vowed to change the way the military conducted its wars);

(4) the political nominating process (no more smoke-filled backrooms, or big city bosses shoving aside individual voters; primaries would be vigorous and open);

(5) religious / faith-based organizations (remember the reforms of Vatican II?);

(6) media – journalism (many more individuals challenged their editors and publishers); also, boundaries would be pushed (think of Penthouse magazine);

(7) public schools (woe to the teacher who strikes a child today);

(8) the workplace (female CEOs?  African-American board members? Heresy in 1967);

And more.  We could argue that the activism and idealism of the late-1960s is still creating evolutionary change in virtually all of our public institutions.  But an increasing army of shareowners are now focused on the last holdout – the public corporation – where democracy lags and there is growing resistance in Corporate America on the part of boards and executives in responding to demands for more “corporate democracy.” Especially when it comes to board nominations and elections, and shareholder-sponsored resolutions to change polices, practices, strategies, and so on.  2008 could well be another cataclysmic year in terms of challenges to the elites.

Professors Berle and Means spelled this out more than seven decades ago – as “agents” of ownership took command of the executive tower, and board rooms (CEOs and boards being agents of the shareowners) the separation of owner – manager in large companies would essentially mean many benefits of “control” would accrue to the management team.  (See our background document on this at: http://www.accountability-central.com/single-view-default/article/background-perspective-on-the-nature-of-shareholder-activism/Berle%2C%20Means/?tx_ttnews%5BbackPid%5D=21&cHash=792247ff34

What does all this mean to us in the 2008 proxy season?  Plenty – we could be moving into a year similar to 1968, with all of its social, political, financial, cultural, and capital markets upheavals. And the battleground, the very public debate arena will be the dozens, even hundreds of proxy voting contests being conducted across a wide spectrum of issues, concerns and shareowner focal points in the United States – including challenges from faith-based investors; traditional corporate governance reformers; mainstream public employee pension funds; mutual funds; social investors…and more!

There is a considerable amount of news, commentary and research on shareowner activism, proxy contests past, investor focal points, management resistance to encroaching “corporate democracy,” public sector response, institutional investor initiatives…and more…in sections and subsections of Accountability Central.

The purpose of this Hot Topic focus is to package the 2008 campaigns in one easy-to-reference section.  We’re interested in your points-of-view and activities during the 2008 campaigns.  Please send information to:  editors@accountability-central.com.

The Editors