Today the Committee on Capital Markets Regulation issued a statement and recommendations regarding the issue of unelected directors. The study examines the corporate governance question – what happens to corporate directors when they fail to receive a majority of shareholder votes in a director election? The short answer, not much. The study finds that 85% of corporate directors who receive less than a majority of votes in a director election are still on the board 2 years later, despite the failure to receive a majority of votes. The Committee recommends, at a very minimum, that corporate boards be required to disclose specific reasons that these directors have remained on the board.
The study is available here.