 Shareholder
activism or apathy?
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Proxy season is in full swing.
Do you know where your proxy ballots are?
Anyone who owns a single share
of company stock will receive an annual report in the mail, as well
as a proxy statement that, among other things, reveals the company's
stance on the ballot proposals to be voted on at the upcoming annual
shareholder meeting. Stockholders typically receive a slew of these
materials in the spring.
Proxy statements, by nature, are lengthy and graphically
unappealing -- with big blocks of text and few pictures. They're
designed to make your eyes glaze over. Nevertheless, they are a
great source of information about what's going on at a company.
If you can't attend the annual meeting because it's at the opposite
end of the country or you have a dental appointment scheduled for
that day, you can always vote your proxies by mail, phone or Internet
in advance of the meeting.
But not all individual investors vote their proxies.
In fact, most well-meaning, good-hearted individuals put their annual
shareholder reports and proxy materials aside in the "I'll-deal-with-this-later"
pile. Then, after the shareholder meetings are but a faint memory
to attendees, the procrastinators rediscover the dust-laden materials
and relegate them to the recycling bin.
I admit that I've shirked my shareholder responsibilities
a time or two. A colleague of mine, just last week, complained that
he wished he could live in a mud hut somewhere, without phone or
Internet capability, because he felt so overwhelmed by the responsibilities
he faces. Most of us are in the same predicament. We have big demands,
both human and technological, placed on us constantly. We have to
prioritize. And unfortunately, certain important duties get neglected.
Lots of activists around
Not every shareholder ignores the chance to get involved. Labor
unions are the original activists, and retirees of companies frequently
get involved with policies affecting their former employers -- particularly
when they see their own benefits dwindle while the boards of directors
approve generous pay packages for senior management.
Institutional investors -- the
guys who run pension and endowment funds -- see a correlation between
attention to corporate governance matters and shareholder value.
They say their involvement in governance issues will become increasingly
important in the coming years, according to a study conducted by
Institutional Shareholder Services, which offers proxy
advice to big investors.
But most individual investors just don't get involved,
says Sister Patricia Wolf, executive director of the Interfaith
Center on Corporate Responsibility, which filed 288 shareholder
resolutions last year and 261 so far this
year.
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