Many boards heaved a collective sigh of relief after this year’s annual shareholder meeting. Many, but not all. At the Citigroup annual meeting, directors fielded questions for six hours, allowing shareholders to express their frustration and pain over the devastating loss in shareholder value.
Meanwhile, in Charlotte at the Bank of America annual meeting, shareholders stripped Ken Lewis of his Chairman mantle. Given these circumstances, most directors in this season of shareholder meetings felt lucky to escape with a random interruption by a shareholder gadfly or an extended question that became a chance to pontificate during the Q&A period.
Directors should not expect board/shareholder relations to snap back to its former state. Shareholders are likely to exert more influence given their success and aided by an activist SEC chairman Mary Shapiro determined to expand shareholder access to the proxy before the 2010 proxy season.
This is a time for directors to think through their vulnerabilities to determine if the company is at risk in the current shareholder environment. What issues are simmering beneath the surface? Most directors know. If they don’t, these traditionally quiet months are a great time to anticipate shareholder relations for the coming year.