A study group of business and academic leaders has issued a report calling on American corporations to become more responsive to consumers and social issues in general.
The American Assembly, a national educational group affiliated with Columbia University issued the report after a conference in Harriman, N.Y., last week.
Entitled "Corporate Governance In America," the report drew on the contributions of 68 invitees and concluded that "American corporations, like other institutions in our society, must adapt to the times."
Citing growing dissatisfaction with American corporations, the group concluded that "corporations must respond to the needs and expectations of shareholders and other claimants, such as consumers, employees and the community."
"Shareholders," the report said, "can sensitize management and directors to social as well as economic issues and should exercise this power."
Consumers can act as "advance guideposts to the needs and expectations of the market place," the report states in encouraging businesses to be more responsive to consumer actions.
"Corporations can and should improve their responsiveness to emerging social and ethical questions."
Specifically, the report recommends that boards of directors should draw the majority of their members from outside corporate management, "unencumbered by relationships which limit their independence."
The report calls for more corporate disclosure to stockholders of information about membership, selection and processes of the board. And, it adds, shareholders should be able to nominate their own director candidates, and have those nominations printed in the proxy statements.
In addition, it says that established proceedings should be set up by corporations to hear groups affected by corporate actions, including open meetings with public groups, and the creation of "quality of life" advisory committees to the board.
Those committees would include representatives of employees, consumers, environmentalists, communities and other interested groups.