At least they can all catch up with one another over family dinner.
Gone to the movies
Netflix, Inc. (NASDAQ:NFLX) has its hands full lately. Many people doubt it can truly compete in a world where Amazon.com, Inc. (NASDAQ:AMZN) is making more and more important deals with streaming. (I am one of those people.)
Call me crazy, but I’d say the company needs all hands on deck for these meetings right now.
Unfortunately, Netflix’s most recent proxy statement actually refers to its website for information on director attendance, meaning an investor who desires this information has to take an additional step beyond simply reading the proxy statement. According to the page, available here, Netflix, Inc. (NASDAQ:NFLX) directors are encouraged to attend board meetings, but it’s not mandatory. (Of course, all companies would “encourage” directors to attend board meetings.)
Even more insulting to investors, directors Richard Barton and Timothy Haley both skipped out on the annual meeting of shareholders. Incidentally, Barton is up for reelection this year (Netflix has a shareholder-unfriendly staggered board, so this year, he’s the only candidate).
Shareholders may want to think before casting their votes; Barton is co-founder of Expedia Inc (NASDAQ:EXPE) and Zillow Inc (NASDAQ:Z), and remains Zillow’s executive chairman of the board. He’s a venture partner with Benchmark Capital. He’s also a director for Avvo and Glassdoor.com. His resume is impressive, but he sounds like a busy man, doesn’t he? In other words, he could be quite overextended.
It sounds like some directors are missing the big picture.
Quality control
GMIRatings indicated nine total companies for this particular corporate governance failure; download the report here.
Obviously, there are a lot of reasons attendance failures may be a problem in terms of duties to shareholders. Shareholders pay directors for their troubles. Some directors are frankly overextended, and simply can’t be of much use to anyone. Some exhibit conflicts of interest. According to GMIRatings, “When a director is failing to attend at least 75% of meetings, it may be a sign of overcommittment or other factors compromising the quality of his or her board service.”
So, when you’re about to vote your proxy this year, do some quality control and make sure directors attend 75% of meetings, and annual meetings of shareholders, too. Presence is an important start in performing the job shareholders pay them for.
The article Are Your Corporate Advocates Playing Hooky? originally appeared on Fool.com is written by Alyce Lomax.
Alyce Lomax has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Netflix, and Zillow. The Motley Fool owns shares of Amazon.com, Madison Square Garden, Netflix, and Zillow.
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