What with substantial shareholders upset with management decisions at Global Investments and M-REIT, the link below is an antidote to all the mindless pontifications by corporate governance experts on the need for more shareholder democracy.
“There is also very little evidence that shareholder democracy works better than directors in deal-making. A number of academic studies suggest it is a wash.”
But before you think I am misquoting PAP on voters and democracy, the piece goes on “There will always be exceptions to every rule. Some boards make bad calls. [There you are, MM excepted, the PAP will never say this.]
‘“Look at the lost opportunity with Yahoo and Microsoft,” said Professor Sonnenfeld about the decision by Yahoo’s board to originally block Microsoft’s offer, a decision that probably lost Yahoo shareholders billions.
‘Professor Kaplan argues that both boards and shareholders will always make mistakes, but that when shareholders are in charge, “Net-net, the shareholder wins.”
‘And he may have a point: While Cadbury’s fate may now be in the hands of fast-money arbitrageurs, “some long-term investor had to make the decision to sell.” And selling is in itself a vote on the long-term future of the company.
‘Democracy is indeed messy.”