The shareholders at Wells Fargo almost exercised “governance” over the Board of Directors.
“Wells Fargo Directors Face Shareholders’ Ire,” The Wall Street Journal, April 26, 2017 A1. Several directors were nearly voted out at the annual meeting on Tuesday, following the Board’s failure to provide sufficient oversight to prevent or even discover the account cramming scandal that persisted over several years.
Directors have a duty of oversight; they are fiduciaries, after all. If they breach that duty, the shareholders can either bring a derivative suit and try to impose individual liability (or reach the insurance), or vote the rascals out of office, thereby besmirching their reputation. But neither remedy is easy. Shareholders face several hurdles to impose governance on the Board.
At least it’s a shot across the bow.