The problem of linear governance | openaccountability

I was kindly invited by James Governor (aka Monkchips) of Redmonk, to participate in a pre-conference Wiki, OpenAccountability. James is hyper-passionate about sustainability and web2, and doesn’t mince words or dialectics; I foresee him turning his dab hand to shareholder activism in time. I posted there, thought it would fit here too…

Corporate communication tends to follow a linear trail, a harbinger from the days when paper + letterhead + signature = legitimacy. It is requirement to communicate to all one’s shareholders as a matter of good governance, updating your investors on their investments and punting the company line into the marketplace as a cumulative benefit. The media that spring to mind here are the mailed reports, EDGAR filings and letters to shareholders.

However, lets scrutinise the company’s annual general meeting (AGM). The company publishes a notice to the AGM (usually as an addendum to the annual report) and sets out the agenda for which shareholders can vote at the AGM. These include appointment of directors, adoption of some matters of course but also how the board sets about allocating shares and profit. Very rarely are matters of strategic direction entertained at the AGM; it is assumed the board enjoys the confidence of the shareholders to do just that (much like cabinet and the president/PM).

WIth globalisation and cross-shareholding, voting by proxy accounts for a huge whack of all votes cast at the AGM. This is now moving into the online space to do away with paper and the attendant inefficiencies.

But why is this not more of a collaborative exercise? The agenda is set by the board, about the board, for the board. Why could a company not open a Wiki or Ideastorm to the shareholding public to know what issues they want to discuss? Those suggestions could be tallied by some impartial body (the Bourse, auditors, etc) and brought into the AGM.

This is how I see Web2 thinking infiltrating corporate culture, or rather capitalist culture. Business spend kaZillions on R+D and talent sourcing but assume those that invested in them will be satisfied with some paltry pre-defined choices? With the markets as they are, dialogue with potential investors is about sustainability and survival. Web2 is the key to that kingdom.

About Derek

My key interests are online investor relations, websites, social media, enterprise 2.0 and intranets, and XBRL. Speak to me if you need a solution in any of these disciplines, or follow my knowledge links on this site and others. Find me on Twitter, LinkedIn or in recent conversations.

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