Corporate Governance

Let's talk about corporate governance uh by that by by that I mean, you know we have to vote proxys in. Right, right. Company's we invest in we have Right. a lot of monitoring Right. and the two of you are very active in that and I, I know know you have strong feelings about the importance of corporate governance. Yep. So, what uh why do you think we should spend so much time there? Well, what what's happened through time is that the institutional institutional investors have become more and more important. A larger fraction of the the total holdings of uh assets. And I think that makes it encumbered on them to get involved in in corporate governance. Somebody should be looking. You have to be looking to see what's going on. Thirty years ago nobody in finance was interested in corporate governance, right? Now that's basically a, an area of specialization by uh by people and I think that's a recognition that it's really important and that that people pay attention. Gene and I both think a big part of our role is to bring what we know from academic research to bear on the problems that Demensional has. Right, exactly right. This is a case where there's an enormous amount of academic research on effective corporate governance. What are the ways that management can add value. What are the ways that management can destroy value. And so, we bring that information into the corporate governance process and say this is the way we want to vote our proxys. Do you have any uh, stories that jump out at you, any examples of how made a difference? I like the poison pill example. Yeah, I do too. What we uh generally mean by uh poison pill is uh it's a device that's used to insulate management from outside shareholders uh it's kind of a huge deterrent uh. It's amazing that it's legal actually. It's one of these uh situations where you have something that's legal, but not ethical. Right. We feel strongly that it's rare that a poison pill is actually adding value for shareholders. Uh, probably adding a lot more value for management than it's adding for shareholders. And so we have a policy that we're gonna vote against poison pills and we're gonna vote against directors that are there when a firm instates a poison pill, without the approval of their shareholders. And what I like in particular is we actually identify it as the directors made a decision and if their the same directors on another board Vote against them there too. We're not just gonna vote 'em against them on that first Right we'll follow them until the end of time. Exactly, we will continue to vote against them elsewhere.