In the recent back and forth on the question of the continued utility of the annual meeting, I’ve been remiss in failing to refer to Professor William Sjostrom Jr.’s article on the subject, “The Case Against Mandatory Annual Director Elections and Shareholders’ Meetings,” which is available here
In reminding me of this article, Professor Sjostrom appropriately laments that it didn’t get a great deal of attention when it was published. This supplemental post is an attempt to remedy that, belatedly, and to suggest that perhaps Professor Sjostrom was just ahead of the rest of us. In any case, I’m glad to join him in focusing on whether the stockholder voting process could be improved.
The “money” lines from Professor Sjostrom’s article, as far as I was concerned, are these:
“There simply is no strong justification for requiring director elections and shareholder meetings annually. Annual elections provide at most a minimal check on management, a check that is not dependent on the frequency of elections. Nor are annual elections critical to the exercise of corporate democracy. Likewise, annual shareholders’ meetings provide little if any opportunity for shareholder deliberation … .”