Corporate Director Elections and Majority Withhold Votes — The Harvard Law School Forum on Corporate Governance

I guess even with oodles of experience,  I am  —  or perhaps, just prefer to be   —   naive.  Every time I read of rules and regulations that are largely show and rarely to never come to the fore unless the brown stuff hits the fan,  I marvel at our many systems of “it is” , at least, “until it is not”.   Since I am one of the most independent creatures one might meet, I am not advocating a totalitarian system or anarchy but isn’t there some better ground than the one upon which we stand?

Excerpt:  In theory, the most significant corporate governance check and balance between public company shareowners and the company is the ability to elect corporate directors. In reality, that control mechanism is complicated and often compromised for a host of reasons. Nonetheless, there has been an increased focus on director elections in the past few years. This study examines what happens when shareowners withhold a majority of votes from a director nominee.

The significance of majority withhold votes for corporate directors is the subject of some debate in the governance and business community. It is sometimes argued that majority withhold votes are of little import because they are infrequent, rarely lead to director resignations, and typically come in response not to corporate-specific failings, but to violations of perceived best practice (such as the adoption of a poison pill without shareholder approval). At the same time, however, some academic literature has suggested that high levels of withhold votes may be an indicator of generally negative market perceptions of a company.

Read full article via Corporate Director Elections and Majority Withhold Votes — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

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