The SEC has made it easier for shareholders who collectively own 3 percent of a firm's shares for three years to hold boards accountable for overseeing executive pay and other decisions that companies make. This will allow large shareholders to have a greater oversight on how their money is been spend.
This also means that large shareholders, such as banks, will be able to use these new powers to press their agendas. Furthermore, a greater oversight on companies will probably mean that they will take less risky investments which in turn means lower but safer profits for the shareholders.
We need to follow the ramifications of this decision by placing more attention to any individual or company who owns 3 percent of a firm and have an agenda to push forward. We should keep an eye for how unions and pension funds react to this news. Moreover, it may also be good to see which banks purchase 3 percent of the shares of a company or ally themselves with other shareholders in order to win the advantage that this new opportunity has made available. However, there is always the danger of conflicting interests within shareholders and companies which may have divisive shareholders should carefully watch.
Marcelo Arteaga Mata
How would this affect the consumer banking industry? This article seems to relate more to investors rather than the average consumer bankers.
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