John F. Olson and Amy L. Goodman, partners at Gibson, Dunn & Crutcher LLP, follow up on Marty Lipton’s article (which I previously discussed here):

In our upcoming paper, we will address some of the issues that deserve focus from shareholders, directors, business executives and other interested stakeholders.

• First, and not necessarily in order of importance, we need to develop effective methods of board/shareholder communication that build on new electronic capabilities but are not burdensome and do not increase liability risks.

• Second, boards and business executives need to effectively and regularly communicate corporate strategy and the board’s oversight role to investors, the business press and analysts, once again without fear of increased liability.

• Third, companies need to make good investor relations, and “good listening” a day to day corporate priority, and shareholders need to take advantage of these opportunities to present their views to business executives and directors.

• Fourth, shareholders need to think for themselves and reduce their reliance on proxy advisory services and be more transparent in their proxy voting decision-making processes.

• Fifth, companies, boards and their advisors need to figure out a way for directors to spend more time addressing strategy and risk and less time on compliance.

• Finally, while efforts to better educate directors about corporate governance and their fiduciary responsibilities has been salutary, we now need to shift our efforts to better educating directors in understanding the businesses, including the risks, of their companies.

Hey, that sounds like what I wrote:

I thus foresee over the next few years growth in mid-size and large private corporations where the investors have extensive access to the records in real-time; perhaps not the same level as in a small private company, but far more than investors and public companies now have. We’ve already started to see that trend with the recent explosion of private equity groups like Blackstone

But I don’t think any of them will change the fundamental problem of the public corporation, in which the investor experiences a ‘distance’ from the nuts and bolts of the operation that is hard to accept in the rapid pace of the 21st century. Hence I still believe there will be a continuing move to private equity, which a corresponding rise in intra-company commercial litigation and arbitration there, as I wrote before.