The current credit environment will no doubt put a crimp in the activities of activist hedge funds, draining them of the cheap money that financed buying sprees and board hijackings. Nevertheless, while this could take some punch out of the current shareholder activist movement that has energized the equities markets for the past year, governance experts do not expect it to shut down. "Sarbanes-Oxley focused on the empowerment of the board," says Mark Watson, managing director of the corporate governance specialist group for Moody's Investors Service. "Now, we're seeing the next phase–more power going to shareholders."

And it was a banner year with an avalanche of resolutions calling for changes in how board members are elected, growing support for new opportunities to weigh in on executive compensation, and a spate of interventions by activist hedge funds. Probably the biggest victory was in the area of so-called majority rule. About 140 resolutions were proposed, calling for a change in corporate bylaws regarding the election of board members. Many of the proposed resolutions were withdrawn before the vote, because the companies agreed to institute the change ahead of time, making the vote a moot point. Most of the remaining ones were passed. There's been growing support for the approach over the last three years.

What exactly is majority rule? Traditionally, companies used something called the plurality vote, through which directors would be allowed on the board as long as they received one vote. Shareholders who didn't favor that nominee couldn't vote against him or her. They were only allowed to withhold their vote. With majority rule, however, nominees who receive more "no" votes than "yes" votes must tender their resignation. The board would then have to decide whether or not to accept it.

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