Reflecting trends in the news, shareholders at annual corporate meetings this year are expected to focus on greenmail, golden parachutes, leveraged buyouts, and industrial accidents as important questions for their boards of directors. This is the conclusion of David Pearson, an Arthur Young audit partner and author of a booklet on shareholder questions. A sample of shareholders' questions compiled by the accounting firm at annual meetings last year shows that among the questions asked most were those concerning executive compensation, investments in South Africa, acquisition and divestiture activities, dividend policies, and liquidity and profitability problems.
Mr. Pearson says shareholders are continuing to take an active role in annual meetings. Their questions reflect a desire to understand the operations of the business and the rationale behind management decisions, he says.
Pearson expects many questions to arise this year on industrial safety because of the Union Carbide accident in Bhopal, India. He also expects inquiries on the recent spate of hostile takeovers and management plans to cope with them and on the effect of the Treasury Department's tax simplification proposals. Important questions that were asked last year might also apply this year, Pearson says.
He says management can do much to improve relations with shareholders by spelling out answers to such issues clearly and explaining how management is positioning a company to take advantage of shifting opportunities.