TEXT OF STORY
SCOTT JAGOW: The shareholders of General Motors met yesterday. And for the first time in the company’s history, they approved two non-binding proposals. As Alisa Roth reports, one of them would change the way GM’s board is elected.
ALISA ROTH: To get elected in the current system, board members have to get the most votes, but not a majority of votes.
Charles Elson directs the Center for Corporate Governance at the University of Delaware.
CHARLES ELSON: Under the traditional system, those with the most votes won. And where you were running unopposed, it meant you could get but one vote and get elected to the board.
And, he says, it left shareholders with little say.
ELSON: There is really, for a shareholder, no way out, no way to register real concern other than voting no.
Under the new system board members would have to get more than 50 percent of the votes to be elected. Elson says it’s a significant difference.
ELSON: It basically gives power to a no vote.
It also gives shareholders more say in the process, and is designed to encourage boards to find members that shareholders like. Elson says more and more companies are passing similar resolutions. Including some big names, like Exxon Mobil. He expects more shareholders will demand similar rights in the future.
But the fate of the GM resolution is still unclear; The board gets final approval.
In New York, I’m Alisa Roth for Marketplace.
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