Walden Asset Management urged CEOs of 59 companies in which it owns shares to end their staggered-board system of election and to institute annual director elections. "(A) staggered board can help insulate directors and senior executives from the consequences of poor financial performance by denying shareholders the opportunity to challenge an entire board which is pursuing failed policies, or not permitting members of an audit committee to be held annually accountable for their performance," said Timothy Smith, Walden senior vice president, in a letter sent to each of the CEOs.
Mr. Smith said in an interview he believes some recipients will begin a dialogue with Walden officials about changing the system. Walden likely will file shareholder resolutions calling for change at some of the recalcitrant companies, he added.
The 59 companies include Anheuser-Busch Cos., BellSouth Corp., Cisco Systems Inc., Coca-Cola Co., Dell Computer Corp., Procter & Gamble Co. and SBC Communications Inc.
Walden manages $1.3 billion, including $870 million for institutions.