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LATER, over lunch in the cafeteria downstairs, the Sisters of St. Francis discussed the delicate dance they face in their shareholder advocacy program — pushing corporations to change their actions, while not needling them so much on sensitive issues like executive pay that bigwigs like Mr. Blankfein, at Goldman Sachs, are not willing to meet with them.
A study by Christine Botosan of the University of Utah published in Accounting Review has contrasted companies that are the most forthcoming in their shareholder reports with the least forthcoming and shows huge advantages capital costs as much as 970 basis points lower for those delivering the most information.
Thus, in addition to the risk of failing in fiduciary duties by the plan administrator from overspending on healthcare, there is also a case to be made that a company's board of directors are failing in their shareholder fiduciary duty by not managing the second-biggest-cost item (after wages).
The least candid companies not only produced a large amount of unspecific jargon in their shareholder letters, but, notably, they also often failed to demonstrate leadership and vision.
Companies that don't use nano-materials have begun stating so in their shareholder reports, she says, in a reflection of how these materials might be viewed as a public liability.
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Corporate directors must act in their shareholders' best interests and not enrich themselves at its expense.
Even companies that appear to be growing are making big holes in their shareholders' wealth.
Taking action at companies that are not being managed in their shareholders' best interests is the only way to hold top executives and directors accountable, Mr. Romick argues.
But these institutional investors have been unwilling to challenge political activities by corporate boards, even when those activities are not in their shareholders' interests.
Her answer made sense - after all, no plc's board would sanction throwing good money at as risky a venture as a costly factory in disputed land such as this, if they were acting in their shareholders' best interests.
Unlike cities, publicly traded corporations have continuous turnover in their shareholders.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com