Focus on The Board

After the early 1990s, shareholder focus turned from anti-takeover abuses and CEO pay/performance disparities to the perpetrators of those failures of oversight, the boards of directors. Shareholders increasingly looked to boards to provide a more independent review of corporate performance, direction, and strategy. Then-CalPERS CEO Dale Hanson told a group of corporate managers, “We are no longer into CEO-bashing. We are now into director-bashing.”

From the shareholder perspective, the “just vote no” strategy became an increasingly important mechanism for sending a vote of no confidence. The 1 percent “withhold” vote at ITT in 1991 was overtaken in 1992 by 2 percent withhold votes at Dial and GM, 3 percent withhold votes at American Express, 4 percent at Westinghouse, Unisys, and Occidental Petroleum, 6 percent at Sears and Travelers, and a stunning 9 percent at Champion International.