7 Comments

  1. Steve Rechel
    October 26, 2010 @ 6:10 pm

    This is a great article with a lot of insight and I agree totally.Possibly the only thing that I could think of to add is a huge grass root movement where all Americans who really care suddenly start to ask questions about where their money is invested.If millions upon millions of people suddenly did a sell off of the stocks that they own that was represented either by companies that have outsourced or had invested in companies that did,this movement along with any added extra boycott or products and tax incentives to bring the jobs back would be like a double whammy effect on these companies.

    Reply

    • Don Shapiro
      October 26, 2010 @ 10:12 pm

      Hi Steve,

      Glad you liked the article. You have posed an interesting concept. Yes, Americans overall are not aware of the power they have through the stocks they own directly or through retirement plans/pension plans and so on. At first, I sort of liked it until I considered the implications. If people tried to apply pressure to large corporations by selling off their stock, some of them (except for the early ones) would end up losing money because the stock price would plummet. My hope is that these ideas I’ve suggested won’t cost individuals any money out of their pocket.

      Your idea does have merit with a slight twist. Instead of selling off their stocks, if all the individual investors (which includes Mutual fund holdings in those stocks) floated a resolution and voted on it to force corporations to bring jobs back, that would work. Most stockholders don’t exercise their voting rights and don’t even know the power they really have if they banded together. The best way to do this is for all the shareholders to give a proxy to someone to represent them at the corporations annual meeting. If that person is representing let’s say 65% of all shares, then the Board has to do what they say because any vote they cast automatically wins. Such a proxy would have the power to get the corporation to do anything.

      Soon I will be writing an article about a crisis in corporate Board governance. I believe this may be a gigantic ticking time bomb if we don’t make improvements soon. Way too many Boards are just too cozy with the CEO they are supposed to be overseeing and evaluating for the shareholders.

      Reply

      • Steve Rechel
        November 2, 2010 @ 8:05 am

        Hi Don
        I like the way you convey your knowledge Don.I actually didn’t properly research the options as you suggested which would be a great way to gain mass representation with the board.I agree with you as I have also been saying that this subject is a ticking time bomb.After the election I will be working on a blog that will include links where a person can quickly find out the stock ticker of a certain company as well as other links that would be helpful as far as individual boycotts.I do understand and I think that most will also that they don’t want to lose money on a sell off but at the same time they might want to make a statement.
        Thanks for your ideas Don and if you come across any links that you think would be relevant can you please forward them to me.I am not even sure that the average American knows about this sort of hidden power that they hold but is completely underused.I will be hoping that this information could go viral timed to any restrictions or closed loopholes that might be passed even though this will be tough if the republicans gain control over the house.
        Steve

        Reply

        • Don Shapiro
          November 2, 2010 @ 10:17 am

          Steve,

          Your blog sounds interesting. Anything you can do to help shareholders better understand their role and power would help our country a lot.

          Shareholder resolutions are not the final answer because they are not binding on the Board Of Directors. But in recent years, there has been a substantial increase in the number of resolutions that have received a majority vote. There has also been an increase in campaigns against the board and pressure tactics when a Board did not follow a resolution. Though it must be understood that not all resolutions are good for the company.

          One of the best and most thorough articles written about shareholder resolutions is at this link:

          http://business.highbeam.com/127/article-1G1-127934900/can-board-say-no-shareholders-say-yes-responding-majority

          This is written by an attorney and is very well researched. You can learn most everything you need to know about these resolutions in this article.

          The recommendation I proposed in my article reflects the ultimate pressure tactic…stop a company’s cash register from ringing. This is something no company can ignore because it will cause their stock price to drop. If it drops enough, shareholders will vote out the Board and throw out the CEO. The last thing the CEO and Board want to see is their stock price go down especially if it is a big drop. This is the one thing they can’t say no to.

          So on a scale of 1 to 10 with 10 being the most effective and 1 being the least effective, a shareholder resolution that gets a majority vote would be a 5 and a mass boycott of a company’s product or service a 10. The key word is mass. It must be large enough to bring the company to its knees.

          The ultimate power of the American people is in how they spend their money and how they vote. Between those two things, they can change the entire country if they wanted to.

          Please keep me informed on what you’re doing to see if there is any way I can be of assistance.

          Reply

  2. Contributors Carnival October 29 2010 | Lead Change Group
    October 29, 2010 @ 2:11 pm

    […] is making a positive difference for all of us.Don Shapiro, of First Concepts Consultants posted on 3 Steps to Boost Jobs and the Economy.  Don suggests that targeted tax credits for hiring the unemployed, lower prices to small […]

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