There are still companies that arrogantly believe that because one or two executives own the majority of the stock, they don't need to consider the interest of other shareholders,' says Rick Roberts with Mendoza Consulting . The fund has outlined a 'model board' that will be used to assess future proxies. CalPers also suggests that compliance, ethics and governance committees should be led by independent directors. Lastly, the board should develop a plan to evaluate itself regularly. Be aware that companies sometimes choose their competitors to put their own performance in the best light.
Dissatisfied investors have two ways to express themselves, aside from selling the stock.
One is by voting against the nominees for directors. The other is by proposing a shareholder's resolution. But reading the proxy before you even invest in a stock can give you a preview of shareholder concerns and help you decide whether you want to share them. This article originally appeared in Individual Investor Magazine . 1999 Individual Investor Group.