WHERE can you legally stuff the ballot boxes with votes from people who do not actually cast ballots? Where can you cling to your position by having those votes push you to a majority?
Why, in America, of course. This happens in elections of corporate directors under something called broker non-votes, which the New York Stock Exchange (NYSE) has asked to be scrapped, but the Securities and Exchange Commission (SEC) has inexplicably failed to even put it out for public comment it since 2006.
Neal Lipschutz, senior vice president and managing editor of Dow Jones Newswires, writes: “In a testament to how long some corporate governance controversies can bounce around, the so-called “broker vote” issue is still alive if not altogether well after years of debate. It should have long ago been relegated to history.”
William Patterson, Executive Director of CtW, the investment arm of the Change to Win labor federation, has written to SEC Chairman Chris Cox urging the commission to approve the NYSE proposal to eliminate uninstructed broker votes in director elections.
“Since many brokers support management as a matter of policy, their ability to exercise discretion over certain uninstructed client shares has been criticized as “legalized ballot stuffing” by parties who don’t share investors’ economic interests,” he writes.
People who disagree that ballot stuffing is bad seem to be very thin on the ground. They are apparently high up in corporate ivory towers or in guarded palaces in a third-world country called Zimbabwe.
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