A significant issue regarding the corporate governance of public companies arises from questions regarding the optimal role of shareholders in navigating a company's direction. The one share, one vote view of the world posits that shareholder democracy is best achieved when the division of control amongst shareholders holds true with the division of economic ownership. In contrast, a number of major corporate players have governance and share ownership structures that allow certain classes of shareholders a disproportionate amount, relative to their economic ownership, of control with respect to strategic decision-making. While these kinds of structures may initially appear contradictory to notions of shareholder democracy, in certain cases they may well be critical to achieving long-term success, and therefore long-term shareholder value, and should not be dismissed or disallowed outright.
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Bowing to criticism, the nation's biggest proxy adviser will soon let U.S. companies verify key datapoints that ISS uses in deciding whether to support an equity plan headed for investor approval.
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First half of the year saw strong gains in number of campaigns but shifting market dynamics are accompanied by changes in stock category and strategy type.
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The most effective corporate governance occurs when a mix of complementary mechanisms that include CEO incentive alignment and both internal and external monitoring mechanisms are present, according to a new study from Penn State Smeal College of Business faculty member Vilmos Misangyi and his colleague from the Singapore Management University.
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Few corporate governance issues have stirred as much controversy as shareholder access. Access provides shareholders with a specified percentage of shares (3% is typical) that have been held for a specified time period (three years is not unusual) with the right to submit a short slate of directors for inclusion in the company's proxy statement. Access effectively reduces the costs of nominating directors to the board.
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