I have included herein a quotation from an article from the web pages of TheStreet.Com:
In Search of Director Independence
by Aaron L. Task,
Senior Writer
"The NYSE's proposal, which has become the template of the reform effort, requires that companies have a simple majority of independent directors on their boards, defining independence as "no material relationship with the company, either directly or as a partner, stockholder or officer of an organization that has a relationship with the company," including investment banking, commercial, consulting, legal, accounting, charitable and familial relationships."
I am surprised that the definition of "no material relationship" in the NYSE's proposal included 'stockholder'. I would believe that stockholders(hereinafter 'shareholders'), big and small, should have the most interest in the welfare of a company. After all, they own the company!
I would agree that not all shareholders have the same objectives as they view the operation of the company. Some, who hold the stock for the dividend income, would be interested in seeing that those dividends continue or, when possible, be increased. Some, who hold the stock as a speculative investment, would be interested only in driving up the share price - possibly at the expense of the dividend.
Since the shareholders elect the members of the Board of Directors, they, as a group, can determine the makeup of the Board. But there is no method used to divide the shareholders into the two primary groups as mentioned above: (1) those who hold the stock for dividend income and (2) those that are speculating on the street value of a share of stock.
I would like to see all shareholders be fitted into one of these two groups. This would be done by having the primary shareholder (me, as compared to my broker) placed into one of the two groups. Then, the NYSE could require that the independent directors be appropriately divided among the interests of these two groups.
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Zcampbell518Z@Zcox.netZ leaving out the "Z"s. |