In examining the companies in which they have holdings, shareholders have become more forceful and willing to ask questions, a new survey shows.
The Economist Intelligence Unit (EIU), in its survey on the state of global corporate governance, said almost three-quarters of the 310 polled senior asset managers think shareholders have upped inspection levels upon the companies they own. "Everybody is obviously on their guard and therefore having to make sure that they put their own house in order," EIU Editorial Director Daniel Franklin told Reuters about executives.
The report went on to say that corporate boards, often thought of as "yes" men for company executives, have begun to take a more active role in decision-making.
Corporate governance matters have moved into the fore of discussions among top managers, as management itself has become increasingly self-conscious about its companies issues and images.
Scandals like those at Enron and WorldCom are thought to be the main reason for these issues becoming so important to both investors and managers. Specifically, the report said that among corporate governance issues, the three that were most likely to be focused on over the next year were concern among executive pay, increased scrutiny of foundering Japanese company standards and clearly defined "good" business practices.