How we can restore confidence in our public companies: the first step: stop talking about maximizing shareholder value as the be all and end all.

• Author: Lorne, Simon M.
• Position: ENDNOTE

When investors vote Investors, on their part, have a responsibility not only to have thoughtful voting policies but also to disclose those voting policies and how companies can contact the investors to discuss those policies. When investors decide to vote--and we are clear that there are situations in which investors may appropriately decide not to vote--they should devote sufficient time and resources to make informed voting decisions. If investors take advice from proxy advisors, they should use the proxy advisors' recommendations only as one data point to supplement their own analysis.

Because proxy advisors play an important role in advising investors on voting on all matters, it is critical that the proxy advisors adhere to the highest standard of conduct in terms not only of avoidance of conflicts or appearances of conflict of interest, but also of transparency in their decision-making process.

Finally, the interaction of companies with their investors on matters of corporate governance depends on the facts and circumstances of each company and each investor. For many companies and investors, engagement will enhance trust and confidence. But not all companies or all investors need to engage directly with each other or engage all of the time. Investors are clear that over-engagement can lead to systemic overload and inefficient use of limited resources.

Similarly, direct engagement between directors of public companies and institutional investors can be beneficial in special circumstances. We endorse the principle that direct engagement involving directors should not be a routine method of engagement for most U.S. companies and for most investors. Many, perhaps most, topics of engagement do not require the participation of company directors any more than they require the participation of senior management or of the investor.

We are confident that if U.S. companies and their investors follow the recommendations of our task force and the recommendations of its advisory board's "Guidelines for Engagement," corporate governance will be improved and necessary public confidence and trust in our capitalist model will be enhanced.

American economic success has long depended on corporations, which drove a 20th century expansion of the middle class and unprecedented opportunities for increasing standards of living. But in the last decade that economic engine has been called into question, and we have seen an intense debate over our system of...