From: James McRitchie <jm@corpgov.net>
Subject: letter to the editor
Date: Sun, 8 Mar 1998 15:39:00 -0800
Re "Who Owns American Companies? Managers Of Course." Owners will continue to allow CEOs and their boards to shut them out through bylaw changes (Computer Sciences) or by going to the legislature (Echlin, Inc.) until they start thinking like owners. Even CalPERS, which is on the forefront of the fight for corporate governance reforms, continues to mindlessly index even as it targets a new round of focus companies for failing their new EVA test.
CalPERS has already spent resources to identify their targets. Now they will spend more time and money trying to win reforms at the individual firms. They claim that, in the past, such efforts have earned them an extra $150 million annually in additional returns. But if they were really acting as owners, wouldn't they buy additional shares in these firms before announcing them as their focus for shareholder action? Can you imagine Warren Buffett or Michael Price making such efforts without doing so? Large institutional investors, such as CalPERS, must make a commitment to act as owners. Only when they do so, will they win the respect necessary to put errant CEOs and boards in their place.
James McRitchie, Editor
Corporate Governance
URL: http://www.corpgov.net
e-mail: jm@corpgov.net
Contact: 
jm@perswatch.net