by Alyce Lomax for The Motley Fool, April 13th, 2011.
America’s most effective shareholders exhibit true grit in their tireless efforts to encourage better corporate governance policies. Not surprisingly, several major public companies are now trying to curtail activist investors’ rights to push for such shareholder-friendly changes. With shareholders increasingly fighting back against bad corporate behavior, perhaps these dubious companies are scared that they might actually lose.
Unpleasant deja vu
For more than a decade, shareholder activist John Chevedden has filed hundreds of shareholder proposals agitating for solid corporate governance policies at well-known public companies. Needless to say, managers haven’t always appreciated his efforts.
Apache (NYSE: APA ) took legal action last year to block his shareholder proposals. Today, more companies may start piling on the litigation bandwagon to silence proponents like Chevedden, who has advocated the declassification of boards, majority voting, and separating the roles of CEO and chairman, among other sensible measures.
KBR (NYSE: KBR ) has already followed Apache by taking legal action against Chevedden, similarly questioning adequate proof of stock ownership. A federal judge ruled that KBR could omit Chevedden’s proposal from its proxy statement. (continue reading… )