In this age of institutional investing where those that wield shareholder voting power are not the investors but the administrators of the funds they invest in, there are times when the most uninformed of these managers take the opportunity to engage in shareholder activism. Prominent players in this type of activism have long been the politically appointed administrators of public pension funds who have consistently espoused the idea of shareholder empowerment—the shifting of decision making from the board of directors, the most informed locus of authority in a public company, to shareholders no matter how uninformed they may be of a company’s operations or ability to enhance shareholder value. These administrators use such activism to advance their careers by scoring political points with their union and political constituencies who have a bias against a board-centric corporate America. Unfortunately, such activism, if successful, can only spell disaster for those companies who are targeted.
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