RiskMetrics, the owner of corporate governance adviser ISS, has just delivered its assessment of the latest round of annual shareholder meetings in the US, also known as the proxy season. Its verdict?

Simply put, the bear market mauled the 2008 proxy season… The collapse of Bear Stearns on the eve of the season let most of the air out of the shareholder activism balloon.

Deteriorating economic conditions meant shareholders were more likely to back management and refrain from ousting directors, while activist pension funds and unions sensed which way the wind was blowing and decided to rein in their demands. RiskMetrics also said companies were getting better at talking to investors on contentious issues.

Yet it added that one type of investor has been pursuing its own agenda in muscular fashion during the market turmoil. It pointed out that many boards - including those of The New York Times Co and Tiffany - have in recent months agreed to yield one or more seats to hedge funds unperturbed by the choppy waters.

July 21st, 2008 in Corporate governance, Managing in hard times | Permalink