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Spurned Directors Continue to Serve

Most corporate board members who win majority withhold votes continue to serve on board.

By Susan Kelly | Updated on August 27, 2012

voting boxCompanies may be moving to provide shareholders with a greater voice, but the trend still seems to have a way to go. A study of 175 instances since 2009 when corporate directors garnered a majority of withhold votes from shareholders shows just 5% of the directors ended up leaving the board.

“Director elections are the fundamental accountability mechanism in our form of capitalism,” says Jon Lukomnik, executive director at the Investor Responsibility Research Center Institute (IRRC), which commissioned the study. “Yet it is an open secret that most directors can be elected with one vote. There is largely a plurality voting system. Moreover, even when directors fail to receive a majority of votes, they still serve.”

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