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The limits of shareholder activism

Via Working Life:

To wit (via The Wall Street Journal):

A record number of corporate directors snatched victory from the jaws of their defeat by shareholders this year.

In a sign of investor discontent, 93 board members at 50 companies have received fewer than 50% of votes cast during annual meetings so far in 2009, according to RiskMetrics Group Inc. That's more than twice as many as any other year since the proxy-advisory firm began tracking the trend in 2003.

But none of those directors lost a board seat. All serve companies with "plurality" voting, meaning they can win uncontested elections with a single vote. Re-elected directors at two companies offered to resign under those companies's "plurality plus" policies, but were reappointed.

Some directors stay on boards after failing to win a majority because they believe they're valuable. "I have the gray matter to serve," says C. Webb Crockett, a longtime board member of Southwest Airlines Co. The Phoenix attorney, whose employer does legal work for the carrier, won 46.3% of votes cast this spring. "How many people who voted against me have any knowledge of my expertise about Southwest and the airline industry?" he asks.

Shareholder activism is a good thing. But, on its own, it won't turn workplaces into more democratic institutions. Only the labor movement can do that.

Bringing us, I suppose, to the SEIU, and its role in creating a heaping portion of shit sausage on health care deform. Not sure what to do about that.

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