Institutional shareholders are more actively seeking to influence corporate governance practices. While this could lead to greater conflict between shareholder and corporate interests, there is no reason to assume that confrontation is inevitable.
Leading institutional shareholders have a clear interest in supporting and enhancing the financial strength of the corporations in which they invest, and the 2007 proxy season is just one milestone along the road down which shareholders, management, and directors are traveling together. Intelligent people may disagree about important issues, but positions often converge following open dialogue in the pursuit of common objectives. Many shareholders understand that while the power to impose sanctions serves a purpose, their interests will be better served by constructive discussion than unconstructive dissent.