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Following the financial crisis of 2007, there has understandably been a substantial increase in shareholder requests for meetings with the board of directors of the companies these shareholders have invested in. A recent corporate governance research study of board to shareholder engagement activities has indicated that that 87 percent of issuers of various securities,
The nature and frequency of engagement between shareholders and board members is changing. These changes are creating and are likely to continue creating a number of potential challenges and complexities for all involved parties. For example, it is still unclear as to how to determine whether an engagement has been a success or not.
The overall success of shareholder activism in the United States is leading to its increase in the U.K. and Europe, and its rise in Asia and Latin America. Recent academic studies suggest that, by and large, activists are good for companies. An analysis of around 2,000 interventions in America during 1994-2007 found not only that the share prices and operating
The annual general meeting is a vitally important event for investors, as it provides a forum where the significant aspects of corporate and financial performance of the company are shared and deliberated. It is even more importantly the place and time at which a number of strategic decisions, which will affect the company direction and future growth, are approved.
Following the 2008 financial crisis, the landscape of corporate governance has undergone numerous substantial changes and this trend has been moving forward at an increasing pace over the last few years. As part of this discussion the evolution and establishment of director pay and remuneration policy have become particular issues of focus. Shareholders want more of a say and more disclosure when it comes to executive compensation.
The dynamic between boards and shareholders of the companies they represent is evolving at a fast pace. This dynamic is now presenting a new set of challenges and these require new tools and techniques in the boardroom. The relationship between boards and shareholders has had to be rethought with a view towards identifying the differences in shareholder and board member perspectives in a timely and appropriate manner.
There is an overall international consensus of opinion that greater protection is needed for the rights of minority shareholders. Regulators around the world have stepped up the controls for such protection, and are in the process of further increasing such controls.