It doesn’t take a scientific survey to know there are lots of unhappy stockholders in America this spring – plunging share prices tell you that. Now, with the annual-meeting season getting underway, shareholders will have a chance to complain to management face-to-face. Voting on proxies, they can even try to change directors and alter corporate policies.
These days, however, shareholders don’t have to wait for the annual meeting to vent their frustrations. Many, especially the big institutional shareholders like pension funds, are working year-round to get companies to adopt better business strategies.
But is shareholder activism really an effective way to boost stock performance?
There is no foolproof formula shareholders can use to assure better returns, of course. But shareholder pressures on management have paid off frequently enough to encourage more and more attempts not only to boost profits but to press social, environmental and other non-monetary agendas.