Purpose & History of Services
The Shareholder Forum™
The Shareholder Forum supports investor interests in corporate
enterprise value with services that require independence – and that may
benefit from the Forum’s network resources and recognition for advocacy
of long term investor interests – to assure a definition of relevant
issues and fair access to information that can be relied upon by both
corporate and investor decision-makers.
The policies that provide a foundation for the Forum’s marketplace
functions have been carefully developed and tested to allow any investor
to participate in its communications, either anonymously or visibly,
without acting in concert. Established originally to accommodate
professional fund managers and securities analysts, this
SEC -defined independent
has proved to be consistently effective in managing orderly processes of
issue definition for rational analysis by all of the various principals,
fiduciaries, advisers and corporate managers who are responsible for
Initiated in 1999 by the CFA Society of New York (at the time known as
the New York Society of Security Analysts) with lead investor and former
corporate investment banker
as guest chairman to address the professional interests of its members,
and independently supported by Mr. Lutin since 2001, Forum programs have
achieved wide recognition for their effective definition of important
issues and orderly exchange of the information and views needed to
resolve them. The Forum's ability to convene all key decision-making
constituencies and influence leaders has been applied to subjects
contests to the establishment of consensus marketplace
standards for fair
disclosure, and has been relied upon by virtually every major
U.S. fund manager and the many other investors who have participated in
programs that addressed their interests.
Currently important applications of the Forum’s independent management
of communication exchanges include the support of corporate managers who
wish to provide the leadership expected of them by responding to either
shareholder engagement or activist challenges with orderly reviews of
issues relevant to long term investor interests. The Forum continues, of
course, to offer this support to investors concerned with the use of
their capital to produce goods and services.
Requests for Shareholder Forum consideration of support may be initiated
confidentially by any investor or by the subject company, or by the
professional advisors to either.
Example of the "Proxy
For those of you who are concerned with the "proxy plumbing" issues
currently being considered by the SEC, a recent litigation case may provide
you with a useful demonstration of the need for improvements.
Apache Corporation has initiated a court action against John Chevedden, the
well-known governance activist, for a judgment allowing the company to block
his submission of a shareholder proposal based on his inability to provide
legally satisfactory proof that he owns the required shares. According to
the complaint, Mr. Chevedden provided records that he did in fact own
shares, but the financial service firms that confirmed his position did not
appear in the records of registered ownership. Leaving aside the comical aspects of this case, the
court filing shows clearly that our current system of defining ownership is
Whether you think this effort to block a shareholder proposal is proper or
not, I assume you will agree that there is something wrong with rules that allow this argument to be made.
What seems like a simple matter of defining "ownership" of stock has become
a real challenge, especially in the context of recently evolved securities
lending and derivatives practices, and needs to be resolved before anyone can
sensibly consider what kind of "plumbing" hardware to order.
It should be noted that there are no plans for the Forum to develop a
program addressing "proxy plumbing." It is a subject that concerns many
Forum participants, though, and your comments will be welcomed.
GL – January
Lutin & Company
575 Madison Avenue, 10th Floor
New York, New York 10022