More power to the shareholder
That’s a demand which might resonate with any investor frustrated by the lack of accountability in public companies
Here’s a great idea, or maybe not: why not give shareholders an annual opportunity to decide whether their company should be put up for sale.
The thinking behind this is that the pressure of giving shareholders an opportunity to force a sale would really keep management on its toes and force them both to justify what they have been doing in the past year and focus on how to improve the business to the extent that shareholders would gain more value by sticking with the current business than they could hope to accrue through a sale.
This idea was first proposed by a banker, James Holdcroft and a law professor, Jonathan Macey and is contained in a recently published book, The Buffett Essays Symposium, a transcript of a 1996 symposium held at New York’s Cardozo law school which covered a range of issues sparked by Warren Buffett’s famous annual letters to shareholders.
Two decades on, the publication has gained considerable attention because so much of what was discussed remains timely.
The Holdcroft/Macey proposal can be viewed as the ultimate in shareholder empowerment and certainly seems attractive in some quarters.
Most obviously it will appeal to shareholders keen to realise the short-term gain of a company.