Governance, Risk Management, and Compliance: It Can't Happen to Us—Avoiding Corporate Disaster While Driving Success

What the Future Holds

We know there are fortune tellers, soothsayers, and those who otherwise claim to be clairvoyant. Now, at the conclusion of this book, I'd like to take a crack at looking forward to the future of governance, risk management, and compliance. So, with crystal ball in hand, here's what we will see going forward.

Shareholders Will Gain Power

The train has left the station, and more passengers are jumping on. There's something extraordinarily democratic about the idea of those who own a company being able to effect important decisions, and gains have already been made. The ability for shareholders to cast an advisory vote on executive pay, including golden parachutes and the like, is now law. Numerous disclosures of such matters as board composition, structure, and operation also are required. Most significant is shareholders' newfound ability to vote on who sits in some of the seats at the board table.

While say-on-pay won't have major impact, directors will be taking note, fearing the possibility of being subject to a future withhold vote. Proxy access will have greater effect—not so much in putting constituent directors in board seats, although that will happen in some instances—but by shareholders or groups of shareholders meeting the 3 percent threshold working behind the scenes to push personal agendas that in most instances will benefit neither the company nor broader community of shareholders.

Gains by shareholder activists can become intoxicating. The more ...