C. Inadequate Proxy Disclosure
The quality of the proxy information provided to shareholders in most other countries is generally much less comprehensive than in the United States. In many countries, companies provide only the most basic information describing the proposals to be voted on at a shareholders‘ meeting. There is generally very little or no disclosure information related to executive compensation, a valuable aspect of U.S. proxy statements. Nor is there much information about a company’s pension liabilities, interested transactions or business segments in any disclosure documents distributed by most foreign issuers. Moreover, in many countries, proxy information need be published Read the rest of this entry »
D. Operational and Logistical Challenges to Exercising Shareholder Rights
In addition to the substantive disadvantages that U.S. shareholders often face overseas, a variety of operational challenges can frustrate the exercise of shareholder rights abroad.’ For example, in the United States, most institutional shareholders are able to submit their proxy votes electronically through a system called Proxy Edge. Outside the United States, by contrast, there currently exists no method for voting shares electronically. Rather, U.S. institutional investors Read the rest of this entry »
E. Recent Improvements
Notwithstanding the difficulties outlined above, many U.S. institutional investors attempt to exercise their voting rights in many markets around the world. As in the United States, mutual fund complexes are rarely activist overseas, although an institution may become involved when fundamental factors affecting the value of its investments are at issue. Indeed, as their foreign holdings increase in size, institutional investors have recently become more successful in certain situations in asserting their rights as shareholders. For example, in 1997, institutional investors in the French company Eramet, including Fidelity Investments and TIAA-CREF, successfully forced the company to abandon a politically motivated and financially damaging plan to dispose of assets engineered by the French government, its majority shareholder. Read the rest of this entry »
