Posted by John Seethoff
Vice President and Deputy General Counsel
A few weeks ago I wrote about the importance of strong corporate governance policies and practices, and the commitment of Microsoft’s board of directors to adopt policies that not only enhance long-term shareholder value and build our brand, but also encourage innovation and appropriate risk-taking. As part of this commitment, our board today recommended amendments to our articles of incorporation that would give shareholders representing 25 percent or more of outstanding shares the right to call special shareholder meetings.
The board’s proposal is another step in balancing the roles of shareholders and directors in governing our company. We believe the 25 percent threshold level of share ownership maintains an appropriate equilibrium by ensuring that a special meeting is supported by shareholders representing a significant but attainable proportion of the outstanding shares.
While this step is the right one for Microsoft, there are over 12,000 public companies in the United States. Each company is different — in its stage of existence, its competitive position and the strategies it pursues to maximize shareholder value. As corporate governance grows in importance as a tool that can help the country move beyond the current economic crisis, it is important that companies have the flexibility to customize corporate governance arrangements that can be beneficial to both the company and its shareholders.
Our board will submit the proposed amendments to a vote of shareholders at the 2009 annual shareholders meeting in November. If the amendments are approved, the company’s bylaws will be updated with the procedural requirements that shareholders would follow to call a special meeting.
We invite our shareholders to communicate with us on this and any other corporate governance issue, either by commenting below or by e-mailing us at firstname.lastname@example.org.