Publication: Does More Power for Shareholders Undermine Board Stewardship?
Date
2011-01
ISSN
Published
2011-01
Author(s)
World Bank
Abstract
The level of shareholders'
expertise and experience needs to be questioned as they
wield greater clout and become more deeply involved in
strategic issues that should be the board's purview.
This misdirected involvement distracts shareholders from
their principal and most important role: electing and
overseeing boards. To play that role, shareholders must have
the basic tools from soliciting proxies of holders of voting
securities to having the ability to seek court relief for a
company's oppressive conduct. One of the important
principles of good governance is the empowerment of
shareholders. Unless they are able and willing to hold
boards to account, then there is little hope, short of tough
and intrusive regulation, of ensuring that company
management acts in anything other than their own narrow
self-interest. But the question is: how far should
shareholders go? Peter Dey's paper brings an important
perspective of someone who is both committed to good
governance and experienced as a corporate director. This
report heralded a new era of increased attention to the
responsibilities of Canadian boards as stewards of
shareholder value. Internationally, the author has been
associated with the International Corporate Governance
Network (ICGN) for the last ten years and has been an active
participant in the Global Corporate Governance Forum,
serving as a chairman.
Citation
“World Bank. 2011. Does More Power for Shareholders Undermine Board Stewardship?. Private Sector Opinion; No. 20. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/be2304fb-11c0-5eb6-af85-ca7722f39043 License: CC BY-NC-ND 3.0 IGO.”