That's right - in one sense, it is a pointless exercise. Or is...

That's right - in one sense, it is a pointless exercise. Or is it?

A couple of years ago, votes on remuneration reports were a joke. No matter the vote, the directors would just give themselves whatever they wanted because there were no consequences.

Now it is not like that, courtesy of a change to the legislation, so there are consequences. Who's to say that, in a few more years, our legislators won't have decided that the rules need more tweaking, so that we have a better outcome more of the time?

In the meantime, I would imagine that the media will always be interested in a story about a CEO who wilfully disregards the votes of shareholders and carries on regardless, making no changes to the way the company is run in the face of clear evidence that change is wanted. Exposure to the glare of public scrutiny is always unwelcome when the facts are plain for all to see. You never know where it may lead or to what extent the matter may be pursued in the public arena.

However, that's as may be. Before the media arrive, the CEO has the option to do the right thing and make the changes which the shareholders obviously desire. The non-executive directors also have the power to reign in the CEO. If they fail in their greater duty to protect the shareholders's interests, they open themselves up to possible charges as well. Thus the interests of the CEO, directors and shareholders begin to align.