Wednesday, August 03, 2011

Proxy Power

This morning, I have been researching Saul Alinsky's idea about using proxy power to elect members to corporate boards of directors.

When a person holds shares in a company, as through an IRA or an ordinary brokerage account, they get to vote on candidates to the board of directors. An e-mail arrives with a voting code. If they just delete this, the board of directors elects the board of directors. But suppose they were to forward it. Suppose they were to assign their favorite organization as their proxy?

The greatest difficulty in using proxy power is in gathering the votes. These are widely distributed. But suppose that every time I get an email proxy from Scottrade - and at this time of year, for each stock in my IRA, they are arriving in the e-mail - suppose I could forward it to "AARProxy" or some such? That would be no trouble.

AARP Proxy needs only to sort incoming emails by company name, then to read the voting codes in the emails into a database. They would also need to examine candidates for the corporate boards they are interested in and to vote when the time comes.

That is to say, modern data processing and communications can easily conquer the mountain of trivial paperwork that would have been involved even ten or twenty years ago. Many, many retired people hold IRAs and have email. As their annual meeting notices come in, for them to forward instead of deleting the emails would not be a problem.

It would, in fact, give AARP a chance to send a "thank you" note to everyone who sends them a proxy, thereby building their base of support.

Even people who just plain hold stock could forward their proxies. Suppose even ordinary guys with brokerage accounts - I'm reminded of a cabbie who was investing in techno-bubble stocks in 2002 - suppose these guys were to forward their proxy emails to AARProxy without deleting them? Or to "ProgressiveProxies", "EarthProxies", "LGBTQ Proxies", "Rand Paul Proxies", "PreacherJesseProxies", "PowerlessAndPoorProxies", "ILoveNYProxies", "TaxiProxies", "HikerProxies", "BikerProxies", et al, ad infinitum?

Proxy collectors would be solicited by candidates for the boards.

The automatic turnover of unused voting rights to the currently elected boards would end.

Does this seem far-fetched?

Whoever writes a proxy-aggregater program that people can download for free will liberate the world.


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