Corporate Governance
Corporate Governance
(Corporate Governance in the U.S. Grows Up, John Bussey, 10/11/12)
A decade ago most CEOs and high ranked executives ruled companys while shareholders had virtually no power in the companys say. We are seeing more independence in the board rooms and the level of accountability for board of directors has jumped exponentially since 2002 taking much of the power away from those high executives. Today, in most companies, all directors are up for re-election annually which is putting more power in the shareholders which decides how the company will continue to be controlled. Also, now 80% of companys reelection process has to have a majority vote, whereas previously if a candidate was unopposed they technically only needed one vote to win.
Corporate governance is based upon the structure in which the company is being run in regards to different systems, principles and processes they go through in everyday business. It sets the guidelines on how the company will continue to run in order to fulfill their goals and objectives previously set forth to achieve. This structure is supposed to ultimately provide the best outcome for the companys shareholders.
I feel that it is important for the companys shareholders to have more of a say in the companys operational structure. Giving the shareholders more perceived power in elections it enables them to contribute to their own well-being and allows them to help them steer the company in the direction that they see best by standing behind a group of directors that they can hand pick and feel a little more at ease with. The shareholders should not have a controlling stake in the voting because there are other people in the business who know a lot more about the market and where it is heading, but it is good that their votes matter more now as opposed to how it was a decade