Changing the board is central to success of shareholder activism.

Financial News, November, 2003

Byline: Kit Bingham

US companies have faced a blizzard of new corporate governance laws and regulations in the past two years but real reform is yet to come, according to a prominent US shareholder activist.Ralph Whitworth, principal of Relational Investors, a $2.4bn ([euro]2.1m) activist fund, said the Sarbanes-Oxley act was of far less significance than the recent proposal by the Securities and Exchange Commission (SEC) to give investors the ability to nominate directors.

"If the SEC would do that, I'd give all of Sarbanes-Oxley back. Sarbanes-Oxley is like cutting the flowers off dandelions when we should be digging up the roots, and the root of the problem is board dynamics," said Whitworth, who has led turnarounds at such companies as Waste...

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