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February 08, 2005

No Democracy in the "Ownership Society"

It's a seductive phrase, the "ownership society," but when we are talking about financial assets, the reality is that the "owners" don't get much say in what's done with their property. You may hear about annual shareholder resolutions, but even those are largely useless since managers regularly ignore their results, because the SEC declares most resolutions to be "advisory" only. And the S.E.C. has just rebuffed investor activists on a proposed rule to force corporations to allow shareholders to nominate alternative candidates to run for corporate boards.

Oh, you didn't know that shareholders can't run candidates against incumbent members of corporate boards? It's all part of the "ownership society" where you may think you own stock but you don't have a real vote in controlling the company.

Posted by Nathan at February 8, 2005 08:41 AM