We've seen shareholders taking action to make things better for decades, even long before institutional investors took up the battle. Years ago I had the opportunity to spend time with the Gilbert brothers—Lewis and John—governance pioneers who worked diligently to help gain even the most basic shareholder rights. They told stories of their attendance at the first Exxon (then Esso) shareholder meeting, which took place in a garage in New Jersey with about 30 in attendance, and how poorly they were treated. Incidentally, these guys weren't gadflies, but rather were—especially Lewis—true statesmen of shareholder rights who worked the system from both the inside and out to gain badly needed reforms.
Further advances occurred over time through the legislative process, government regulation, stock exchange rulemaking, and the judicial system. Matters such as independence of board and key committee membership, private meetings of independent members with presiding directors, expanded disclosure of management's compensation, financial experts on the audit committee, board assessments, and enhanced financial reporting and other disclosures, to name just a few, have been established. These have positioned boards to provide enhanced oversight of management and help shareholders gain better insight into board processes and decision making and make boards more accountable.
But more and more was and is demanded. Shareholders now have gained greater power with access to ...