The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Sat, 23 May 2026 11:30:35 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png The Fundamentals of Director Oversight Under Threat – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 The Fundamentals of Director Oversight Under Threat https://corpgov.law.harvard.edu/2010/04/23/the-fundamentals-of-director-oversight-under-threat/?utm_source=rss&utm_medium=rss&utm_campaign=the-fundamentals-of-director-oversight-under-threat https://corpgov.law.harvard.edu/2010/04/23/the-fundamentals-of-director-oversight-under-threat/#comments Fri, 23 Apr 2010 13:09:04 +0000 http://blogs.law.harvard.edu/corpgov/?p=8790?d=20150120102541EST Posted by Andrea Unterberger, Corporation Service Company, on Friday, April 23, 2010
Editor's Note:

Andrea Unterberger is Assistant General Counsel and the Director of CSC Media at Corporation Service Company. This post is an excerpt from the 2010 Edition of The Directors’ Handbook, by Thomas J. Dougherty of Skadden, Arps, Slate, Meagher & Flom LLP. In the foreword to the edition, Mr. Dougherty explores how recent reform initiatives will result in an irrevocable shift of power in the boardroom.

Several “reform” initiatives bred by the financial and regulatory crises of 2008–2009 now threaten to undermine the fundamentals of director oversight in 2010 and beyond. Collectively, if not individually, these destabilizing dynamics will alter the balance of power utterly between directors and activist stockholders, between federal and state regulators, between American and foreign sources of capital, and between models of consensus and contentious corporate governance.

The principal forces amassing to shift power and destabilize those respective relationships are the combination of these “significant seven” developments:

  • 1. Proxy Access: the SEC’s new sweeping “proxy access” proposals;
  • 2. No Broker Voting: the SEC’s abolition of broker voting of “uninstructed” retail client shares;
  • 3. Anemic “e-voting”: the perverse decline in retail stockholder voting following recent substitution of “e-voting” for slow-mail proxy distribution;
  • 4. “55 × 70 × 55”: the ever-upward rise of institutional share ownership dominance from “55-cubed” a decade ago (when more than 55 percent of the shares of more than 55 percent of Fortune 500 companies were owned by fewer than 55 respective institutions) toward “55 × 70 × 55” today (more than 55 percent of the shares of more than 70 percent of Fortune 500 companies are now owned by approximately 55 respective institutions);

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