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The Shareholder Spring Continues

LONDON – It is annual general meeting season – the time of year when some of the world’s biggest companies gather to report to shareholders and have some semblance of a conversation with them. For the next couple of months, a succession of companies will talk about what influenced their performance over the previous year, what they are planning for the future, and the decisions that their boards have made.

There was a time when these meetings took place without much fanfare, mostly unnoticed by the public. That has not been true for a couple of years. A worsening economy and widening inequality have spurred more people to become more engaged and take an interest in the activities of companies and those who run them. And, with that change, attention has broadened from CEOs and executive teams to those who previously existed in a black box: the companies’ board members.

In 2012, shareholders and others started shining a bright light on boards, questioning their decisions and activities, and those of individual members, and thus was born the Shareholder Spring. People grew tired of tone-deaf board directors operating in soundproof rooms, seemingly ignoring economic realities and the public’s mood. They wanted to confront those who decide on executives’ often eye-popping compensation or approve companies’ decisions to undertake sophisticated tax engineering. People wanted to know whether board members were actually doing their jobs or just filling seats and collecting a nice fee.

Many companies and company boards hoped that this heightened interest would pass quickly; instead, it has matured. Discontent has continued to mount, and investors, employees, politicians, and members of the public now want to know not only about executive compensation, but also about the frequently staggering discrepancy between what companies’ highest- and lowest-paid personnel earn. They want to know about living wages and zero-hours contracts. They want to know what companies are doing to address climate change, whether they are responsible community members, how they behave in conflict zones, and much more.