The revolution is over! (oops, not yet)
Shareholder activists have won the revolution… so says today’s The Wall Street Journal.
But let’s not all fly off to Sardinia for that Kozlowski-like party yet.
A superficial article on the front cover of Section C includes some statistics about more board seats won, more resolutions adopted, etc. But nowhere does the author stop to ask, “If, since 2006, 218 companies have awarded board seats to activists, isn’t it possible that 2,000 more companies are still in need of turnover in their boardrooms as well?”
Certainly some dynamics in shareholder activism have changed for the better. But many boards still act as if they work for the CEO, and not the other way around.
Executive compensation continues to skyrocket toward unprecendented levels. Boards at poorly-run companies are rejecting 62% premium offers because of emotional attachments. The country is facing a massive credit crisis because directors at investment banks, commercial banks, housing lenders, and other enterprises all failed to understand business fundamentals.
In other words, we still have a long way to go.
To read The Wall Street Journal’s article, click here.
