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All too often boards let their friendship with management win out

If you’re a shareholder, large or small, you should read this article:

The implicit message from directors to shareholders runs something like this: “Give us your money and we will represent your interests in an organization managed by people who have an incentive to steal from you and who we’ve known for years and with whom we confer regularly in private meetings. You don’t get to attend these meetings or even get to know what goes on in them. In the meetings with management, we will set their level of compensation and then, with their approval, we will set our own level of compensation. Don’t worry, the two processes are totally unrelated. No, you don’t get to vote on the level of compensation for either them or us—and, yes, you will be paying for all of it. You can trust us because we’re independent of these people with whom we’ve been conferring privately for years.” It’s almost like something out of a Kafka novel, with the shareholder in the role of the confused and doomed protagonist.

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