In 2008 and 2009, the federal government effectively hired and fired directors at American International Group and Bank of America. At AIG, the government exercised its power through the ownership of voting stock, which meant that the company’s public securities filings revealed the government influence, though at times slowly and at times only by inference. At BofA, by contrast, the government imposed its will through an unpublished bank regulatory action, and no securities filing provided even a hint of the federal role. The fact that current law allows the government to secretly reconstitute the governing bodies of multi-billion-dollar, publicly traded companies is cause for concern, for who controls the board controls the company. This article argues that, just as securities filings alert investors when private parties attempt board change, a new required filing should inform investors when the government seeks to push sitting directors out or bring new ones in.
William O. Fisher, When the Government Attempts to Change the Board, Investors Should Know, 40 Pepp. L. Rev. 533 (2013).