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In theory, corporate
shareholders are immensely powerful. They own $13 trillion in assets
worldwide. But shareholders are carefully constrained in their efforts
to exercise this power. Is the balance of power between shareholders
and corporate managers reasonable and fair?
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- Under SEC
rules, companies can offer (but not require) electronic delivery
of proxy statements and annual reports. Intel Corp. was one of
the first companies to make its proxy statements and annual reports
available on a Web site. The company first sent investors a request
for consent to receive the documents electronically. About 10
percent of shareholders returned the consent. The company then
sent them notice of the Web site address. Proxy cards (for voting)
could not be downloaded, however; each shareholder was sent a
hard copy. Read about Intel's policies on corporate governance
at http://www.intc.com/intel/finance/corp_gov.htm.
- Recently,
groups of dissident shareholders have begun to use the Internet
to coordinate their efforts and maximize their impact. They post
proxy materials, press releases, and letters on a Web site and
then take out ads in newspapers to publicize the address. Sometimes,
investors have used Web sites to encourage opposition to management
initiatives without having to incur the expense of soliciting
proxies.
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