Corporate Finance: Instructor\'s Manual Applied Corporate Finance

Aswath Damodaran 17

Business Week piles on... The Worst Boards in 1997 ..

A poor board does not necessarily translate into a poorly managed firm. For

instance, Disney and Coca Cola do not have highly rated boards but delivered

superior returns to stockholders over the period.

As a stockholder, however, the fact that returns are good might not compensate

for the fact that you do not believe that managers are responsive to your

interests. (At the Disney stockholder meetings in both 1996 and 1997, there was

substantial stockholder dissension in spite of the fact that the stock had

performed very well in both periods.)