The Season Of Disconcerted Shareholders

NEW YORK – A few years ago a wave of corporate scandals triggered a mass movement to improve corporate governance. Well, corporate boards evidently have not got the message.

Spring is proxy voting season, when company shareholders vote on how their investments are run, and resolutions by disgruntled owners, especially unions and other institutions, speak volumes.

Proposals to rein in executive pay, the hot issue for the last few years, are down substantially — although still alive — and investors are taking aim at the boards themselves. Majority voting of directors, conflict-of-interest restrictions and disclosure of corporate political contributions are on the table at dozens, if not hundreds, of companies.

Some of the proposals were even written by the little guy with a few hundred shares.

And even more telling than the number of resolutions is how boards have chosen to react, by almost universally opposing each and every one. Their argument: we're doing a fine job as it is, thank you. Our top managers deserve top pay, even if we don't tell you exactly how much they get. And listing the company's generous political donations would cost us, and you, too much money.

Hogwash.

Institutional investors are on to something and they're even making some progress.

Coca-Cola (KO), McDonald's (MCD) and Staples (SPLS) headed off shareholder proposals by agreeing to divulge their political gifts, according to Institutional Shareholder Services. Majority voting resolutions — so that unopposed directors must actually win more Yes votes than abstentions — are up to 126 for the first half of the year (from 79 a year ago) and some companies are capitulating there too. But capitulations are the exception rather than the rule.

Shareholder voting is run a little differently than our national democracy. The more shares you have, the more times you get to vote, so you may be feeling like small fry next to investors with millions of shares. Don't let that stop you: unwrap the plastic on those annual reports and read up. Almost all companies allow proxy voting online, which makes it even easier to have your voice heard. Would that Washington could figure that one out.

And unlike voting for president, you're not stuck with the choice of the majority. If you don't like what's happening at a company you own, you can vote with your feet and sell. Try doing that with your Congressman.