Corpgov.net's publisher James McRitchie often puts up fascinating posts that hit on controversial issues in corporate governance. He even put up a post referring to one of my posts that referred to one of his. That potentially overboard back-and-forth earned a soft spot with me. But that’s not why I’m writing about him now.
It’s just that I’m a bit shocked by one of his latest news updates. I had no idea how much investors wanted to pick the auditors of companies in which they invest.
As McRitchie explains, most companies submit auditor choice to a non-binding shareholder vote. 'Most' isn’t enough for CalSTRS, which he notes ‘has petitioned the SEC to make such votes mandatory.’ He takes it further suggesting shareholders should be able to choose the auditor at the get-go, a concept he borrowed from Mark Latham, founder of the Corporate Monitoring Project.
That way, the popularity contest wouldn’t be just among management.
By Janine Armin
Corporate Secretary magazine