Investors Have Spoken: 5 Trends in Shareholder Proposals

With the enactment of Dodd-Frank in 2010 (and a host of other social and compensation initiatives), corporations have seen heightened levels of shareholder engagement. Recently, we invited activist shareholder James McRitchie to the show to glean insight on the mindset of activist investors. The issue for McRitchie, as he explains, is not an issue between the shareholders and the boards—rather, the problem lies among the shareholders themselves. Large institutional investors experience a conflict of interests, which prevents them from voting in ways that benefit their stakeholders and smaller investors, says McRitchie. As these institutional investors continue to grow their share of U.S. equity (68% in 2015), they’re seizing the opportunity to become more involved in the corporate strategy of their investees (more on hedge fund activism in Paula Loop’s report). All this to say, the world of corporate governance looks drastically different than it did 10 years ago, and corporate boards can no longer sit back and engage on their own accord.