But that would require a clear policy, political courage and punishment for incumbent managers and shareholders.
As things stand the incumbent board sends shareholders a ballot, or proxy, listing its preferred candidates.
The rules governing the balance of power between incumbents and outside shareholders are now substantially tilted in favor of insiders — both relative to earlier times and to other countries — rather than outside shareholders.
The current ability of insiders to adopt low-threshold poison pills is a highly relevant factor for any assessment of the rules governing the relationship between incumbents and outside shareholders.
State-level advocates have voiced a preference for a more incremental approach that would allow incumbent managers, boards and shareholders of individual companies to decide whether shareholder proxy access is desirable and, if so, the details of any conditions that should be included in the company's bylaws.
The Securities and Exchange Commission would do well to conduct a comprehensive examination of the rules governing the balance of power between incumbent directors and outside shareholders.
It bars buyers of a controlling interest from voting their shares unless and until they win a majority vote of all other shareholders, excluding incumbent management.
Asked whether she thought it was incumbent on a controlling shareholder of an ailing business to inject funds they may have at their disposal – instead of or in addition to any help by the taxpayer, Hill replied: "I wouldn't even speculate on that.
Incumbent managers are finding that shareholders, particularly foreign ones, are not amused by their tactics.
The recent tussle at Hewlett-Packard between its boss, Carly Fiorina, and Walter Hewlett, a dissident board director, may have cost the company's shareholders $150m.As the incumbent management has the corporate coffers at its disposal, this expense tends to make proxy fights one-sided affairs: even the smallest of Hewlett-Packard shareholders reported receiving 20 or more calls from the company.
Indeed the incumbent board should look to shareholders for suggestions.
