In Slate.com recently, Nell Minow, a respected corporate gadfly, lamented the shortage of gadflies these days. She praised the late Gilbert brothers, who, over the past many decades, brought about invaluable reforms we take for granted today.
For example, she writes:
They persuaded the then-brand-new SEC to allow shareholders to circulate their criticism of management at company expense by submitting shareholder proposals that would be included on the company's proxy. The Gilberts fought for shareholder approval of auditors, confidential voting to protect shareholders from coercion, cumulative voting to give minority shareholders the ability to elect one director to the board, and annual meetings held in cities that were conveniently located. The Gilberts were among the first to object to outrageous CEO pay packages.
Minow also notes, "They made a lot of money, too. Their investment policy was simple: Never sell." She explains that few small investors become gadflies, since making waves would consume a lot of energy for those with relatively tiny stakes in a company. Instead, institutional investors should take action. "They do have the time, the resources, the analytic power, and the sheer amount of money at risk to monitor accounting tricks and executive compensation abuses," Minow writes.
They usually don't take action, though, often due to conflicts of interest. But today there's news of an exception. The Wall Street Journal (subscription required, free trial available to Fools) reports that some big Tyco
To learn more about the gadfly biz, since you have the power to become one yourself, check out Nell Minow's website, The Corporate Library. Also, read about the admirable-but-weird gadfly Evelyn Y. Davis, and check out the 1956 movie Solid Gold Cadillac, starring the wonderful Judy Holliday. It should be especially enjoyable for Fools.
