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Increasingly active shareholders: What management needs to know—and do
Author(s) -
Hoff Jonathan M.,
Reina Lawrence J.
Publication year - 1992
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.3970030404
Subject(s) - shareholder , shareholder resolution , corporate governance , accounting , business , commission , compensation (psychology) , variety (cybernetics) , institutional investor , executive compensation , finance , psychology , artificial intelligence , computer science , psychoanalysis
Institutional investors, especially pension funds, have become a new breed of active shareholder, challenging the classical concept of shareholders being essentially passive. The sponsorship of increasing numbers of annual shareholder resolutions on a variety of corporate governance topics is one visible measure of this increased activity. The effect of these measures can be seen in several areas: in efforts to change federal regulations relevant to shareholder proposals both at the Securities and Exchange Commission and in Congress, including recent proposals to increase shareholder consideration of executive compensation levels; in proposals for increased dialogue between management and shareholders; and in studies that question basic assumptions about the roles and relationships of management and shareholders. This article examines these important developments—all of which are indicative of positive trends in the evolution of the management‐shareholder relationship.