Corporate Governance

A Practitioner’s Guide to Electronic Shareholder Forums

By Harvard Law School Program on Corporate Governance

Our firm has recently released a Corporate Governance Commentary providing an overview of the recent proxy rule amendments designed to encourage the use of electronic shareholder forums (for convenience, referred to as “e-forums”). The amendments were hastily adopted at a time when most of the attention was on proxy access. While the amendments were intended to benefit both companies and shareholders, it is activist investors who may be the most significant beneficiaries.

The Commentary, entitled “A Practitioner’s Guide to Electronic Shareholder Forums“, explains how the amendments facilitate the use of e-forums, and what the potential risks and benefits to companies are. It explains that for a lot of companies, e-forums may serve as an additional channel of communication with shareholders for which the companies do not have a pressing need. For companies that do decide to construct or participate in e-forums, the companies will have to be careful that the e-forums are functionally useful and are not used for launching tirades against management. Perhaps more troubling for companies, e-forums will improve the ability of hedge funds and other activist investors to mobilize.

The full Commentary is available online here.

Full post as published by The Harvard Law School Corporate Governance Blog on February 05, 2008 (boomark / email).