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June 28, 2011


James McRitchie

Another approach would be that suggested by Mark Latham, the founder of VoterMedia.org. Let shareowners choose the auditor by vote. See section 5 of Latham’s article “Proxy Voting Brand Competition” in the Journal of Investment Management, January 2007.

Latham proposes shareowners should at least be permitted to vote on a company-by-company basis through private. Unfortunately, the SEC has allowed management to exclude such proxy proposals, buying the argument that auditor selection is an “ordinary business” matter. I don’t know how anyone can agree with that after the collapse of Enron after a relatively clean bill of health from their auditor.

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