COMMENT The winds of change that brought President Barack Obama into office will soon blow through US boardrooms. Unfortunately, executives are not welcoming this as a breath of fresh air but see it rather as a dangerous intrusion into their affairs. Storm clouds are gathering at the US Business Roundtable, while the US Chamber of Commerce and Republican commissioners on the Securities and Exchange Commission are straining to hold back corporate governance reforms that will tip the balance of power away from managers to owners – the shareholders.
The financial crisis exposed many boards as weak and incompetent. If boards failed to exercise effective oversight, why did shareholders not simply replace them? The answer is that US law and practice make it an uphill struggle for shareholders who want to hold boards to account.
