The Associated Press has an article on requiring corporate governance reforms as part of the settlement of shareholder litigation. The author reviews some recent settlements that included reforms (Broadcom and Applied Micro Circuits) and argues “these settlements help debunk arguments against further governance reform for all public companies.” (The 10b-5 Daily most recently posted about this issue.)
Quote of note: “Only four of the 63 settlements reached in class-action shareholder suits so far in 2004 have produced governance reforms, according to Bruce Carton, executive director of securities class-action services for Institutional Shareholder Services, an adviser to major money managers. But while hardly an avalanche of reform, the recent activity does stand out compared with the prior two years, when only five of 346 settlements produced governance changes.”
Addition: An astute reader notes that the above statistics almost certainly understate the number of shareholder cases that have resulted in corporate governance reforms because corporate governance reforms are often implemented as part of the settlement of a related derivative suit, rather than in the settlement of the securities class action.