The NY Times has run a good article on boardroom/shareholder engagement on director selection. In an aim to bring about a greater shareholder voice in boardroom matters, a number of institutional shareholders such as pension funds want more of a say in director selection. The concern is one of boards selecting cronies or friends for boardroom roles. A related concern is to ensure shareholder views on boardroom diversity, compensation, and other issues are fully acknowledged. The backdrop is of course board/management responsiveness to shareholders requests.
This movement ties in with other recent news that investors are now seeking to hire proxy solicitors to drum up investor support for these concerns. There is a rich litany of academic research on this tension, including the well known piece by Baysinger & Hoskisson (1990) entitled The Composition of Boards of Directors and Strategic Control in the AMR and more recently Board of directors' responsiveness to shareholders: Evidence from shareholder proposals (2010) by Ertimur, Ferri and Stubben in the Journal of Corporate Finance. This later research found that boards which implemented shareholder driven proposals were less likely to be removed from their positions.
The full NYT article can be found here: http://www.nytimes.com/2014/
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