The Corporate Monitoring Newsletter

Issue #15 - November 2002

Written by Mark Latham

IN THIS ISSUE:

1. Three Shareowner Empowerment Proposals Submitted:
   (a) Proxy Advisor
   (b) Auditor Reputation
   (c) Voting Leverage

2. "Democracy and Infomediaries" Forthcoming in
   Corporate Governance: An International Review

3. Spreading Corporate Monitoring Ideas in Asia

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1. THREE SHAREOWNER EMPOWERMENT PROPOSALS SUBMITTED

I recently submitted three proposals, all designed to make shareowner voting more powerful by using competing intermediaries: proxy advisors, auditors, and institutional investors. Full text of each is linked from the summary table at www.corpmon.com .

(a) Proxy Advisor Proposal -- Voting Deadline December 5:

This is still our flagship proposal, for shareowners to vote to choose a proxy voting advisor paid with company funds. It is in the current proxy of A. Schulman, to be voted on by December 5. I also submitted it to Oakwood Homes, for inclusion in their proxy to be filed soon.

(b) Auditor Reputation:

The SEC continues to let management omit from the proxy my proposal for enabling shareowners to select the auditor by vote. So I have submitted a milder proposal to Cleveland-Cliffs and to USG, merely asking the Board to conduct a nonbinding shareowner poll of auditor reputation. The goal is to encourage auditors to build their reputations in investors' eyes, not just in management's eyes.

(c) Voting Leverage:

I just submitted this new proposal to Visteon Corporation. Now that more institutional investors are posting their voting decisions on the worldwide web before the voting deadline, individual investors can imitate those decisions. This proposal asks the Board to consider modifying the company proxy to facilitate this, such as by adding a checkbox saying: "Vote this entire proxy the way Calvert Group votes theirs."

By breaking the Board's monopoly on guiding shareowner voting in the company proxy, this would increase the voting power both of individuals and of institutions.

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2. "DEMOCRACY AND INFOMEDIARIES" FORTHCOMING IN
   CORPORATE GOVERNANCE: AN INTERNATIONAL REVIEW

Available on the web at www.corpmon.com/Democracy.htm, this paper analyzes the links between corporate governance and civic politics, showing how corporate governance reform can lead to political reform. It will be published in the UK journal Corporate Governance: An International Review in about April 2003.

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3. SPREADING CORPORATE MONITORING IDEAS IN ASIA

I have become an itinerant preacher of shareowner empowerment, giving presentations at Hong Kong University of Science & Technology, Beijing University, and Shanghai University of Finance & Economics. I am learning about corporate governance in Asia and seeking opportunities to implement our proposals.

Approximate itinerary --

Sept 11 - 20, 2002: Hong Kong
Sept 21 - Nov 1:    Beijing
Nov 2 - Dec 11:     Shanghai [phone +86/135-1217-6675]
Dec 12 - Jan 12/03: Hong Kong [phone +852/9807-0734]
Jan 12 - Feb 25:    Singapore
Feb 26 - March 28:  San Francisco
March 29 - April 5: Los Angeles
April 6 - May 31:   Tokyo
July 9 - 11:        Amsterdam ICGN Conference (www.icgn.org)

Updated itinerary at www.corpmon.com -- click "Contact Us".

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