Institutional shareholders should demand Coca-Cola Co. ask Richard M. Daley to step down as director or explain why, in the face of a personal challenge, he should stay as a member of the company's board.
Shareholders should expect directors be capable of representing their interests on the board to the fullest extent required under their corporate fiduciary duty.
Mr. Daley is a high-profile director because of his extensive political skill. But Mr. Daley — the longest serving mayor in Chicago's history who declined to seek re-election in 2011, when he joined Coca-Cola's board — might not be in a position to fulfill that responsibility to shareholders.
Shareholders ought to examine Mr. Daley's ability to serve as a director because he was excused on medical grounds July 23 from testifying in court about a financial matter that arose during his tenure as mayor.
Mr. Daley — also executive chairman of Tur Partners LCC and Daley & Tang Partners LLC, both private equity firms, and of counsel of the Katten Muchin Rosenman LLP law firm — is correct to place priorities on his health and privacy. But if a medical issue renders him unable to testify, shareholders should question his ability to fully discharge his tasks at Coca-Cola.
Mr. Daley and Coca-Cola media representatives didn't respond to requests for comment.
Mr. Daley, paid $250,951 as a director in 2013, was the only director who did not attend Coca-Cola's annual meeting April 23. “The company does not have a policy about directors' attendance at the annual meeting of shareowners, but directors are encouraged to attend,” its proxy statement states.
In this era of increasing communication between shareholders and the board, institutional investors ought to express their concerns to Coca-Cola and Mr. Daley, and he should reassure shareholders he can perform his duties.