The past few weeks have witnessed extensive media coverage of two subjects for which investors should have taken extensive note: 1) There are an increasing number of high-profile companies whose shareholders are expressing dismay over corporate governance practices, and 2) high-profile initial public offerings (IPOs) have been drawing extraordinary interest from excited investors.
As I contemplate these two phenomena, I am struck by an interesting thought: Prospective shareholders do not scrutinize corporate governance nearly as often as shareholders who have lived with the governance of their companies over a longer period of time. I can’t help but wonder if investors who are caught up in the excitement and promise of IPOs aren’t missing an “elephant in the room”: What type of governance will the new company have once they own a piece of it?…