There is, therefore, some of the self contradicting in the report. He states the precise legal basis for the imposition of fiduciary responsibility and, then, in the next breath says we do not favor a legal obligation vote. It would appear as if exactly this legal obligation has been created, but not by the Parliament which is the subject of Sir Ronald s concern, but by the equity branch of the Common Law courts - the Chancellor sitting on the woolsack. Possibly, Parliament would have trouble crafting a law combining sufficient precision and flexibility, but those are exactly the time-honored characteristics of the English Chancery courts. So, unnoticed and uncommented upon, we are at the threshold of a new era in which the obligation to vote will be monitored carefully by the courts.
Lets consider what proofs exist for the alleged correlation between activism and value.
Because corporate managements have tended to be threatened by the prospect of owner activism and because activists have been anxious to generate statistical confirmation for their commitment, one must consider carefully the sources of purported proofs. The most widely cited evidence for the efficacy of corporate governance are a series of reports generated by Stephen Nesbitt, a respected professional from the consulting firm Wilshire Associates, showing the positive impact of many years of targeting of poorly governed companies by the Public Employees Retirement System of the State of California. Unhappily, we must note that CalPERS is one of the most significant clients of Wilshire. A far different prospect emerges from the work of McKinsey, one of the most respected management consulting firms in the world. Some investors will pay a significant premium for good governance.