Quick Take: Coal-porate Governance

Corporate governance is hardly a hot topic these days. Who has time to get worked up about related party transactions and poison pills when there's housing pain, subprime sores, and even excess trader testosterone to worry about?

There are a lot of macro distractions out there, but I want to recognize coal miner Peabody Energy (NYSE: BTU) for taking a minor step toward better corporate governance.

In the name of "continuity," many companies stagger the multi-year terms of directors serving on their boards. Whenever you observe only a fraction of board members stepping up for re-election in any given year, you're looking at a staggered or "classified" board. Like a poison pill, this is a pretty standard anti-takeover measure that can make it harder for dissident shareholders to shake things up.

The coal industry is split pretty evenly between classified and non-classified boards. Arch Coal (NYSE: ACI) and Massey Energy (NYSE: MEE) throw stagger parties, whereas Consol Energy (NYSE: CNX) and Alpha Natural Resources (NYSE: ANR) do not. I'm pleased to see Peabody potentially joining the latter group by putting the matter of de-staggering its board up for a shareholder vote.

Given the fact that institutional investors almost always vote in line with management proposals, it's a pretty small concession for a company to offer up its full slate of directors for re-election each year. Kudos anyway, Peabody. Your baby step has not gone unnoticed.