It's been a while since Robert Coates's group tried to gain positions on the board of directors. I think it's worth recapping what went on.
Coates and other investors have grown increasingly concerned with the valuation of Netro stock. The company got a huge amount of capital to fund development of fixed wireless broadband access products and markets. Since the well promoted IPO ("supported" in the double talk of Wall Street), Netro has ben unable to gain a threshold of sales and has shown repeated failures to move toward profitability. You could blame this on "market conditions" or industry debt crisis, but a lot of other elements, many of them avoidable, have gone into this failure including misdirected product development, lack of understanding of technological and market forces, and inability to put together a saleable set of products. yes things are sick in the industry but if market conditions change then it is up to management to mold the company to those circumstances, not to bitch about them. It's their job to put investor's money profitably to work . . . or if they don't have a viable plan then to give it back as intact as possible.
As we see daily in the headlines, investors are becoming increasingly aware that "something is rotten in Denmark" i.e.. "the system" is screwed up. The corporate system and public funding of companies through stock and bonds was built on a system of trust. that trust was supposed to be secured, in part, by a system of "checks and balances" between the various forces that are at play to gain control of the money, rewards, and governance of the company. Investors, while usually not in direct control of the company, are supposed to be represented by mostly independent boards of directors who are responsible for protecting shareholders interests above the interests of company management. They are supposed to watch over the accountants and management to ensure that "everything is on the up and up". They should appoint an audit committee comprised exclusively of independent board members and outside advisors. They should have access of the information from the company to judge how management is steering the resources and how well they are meeting goals. Shareholders themselves should have the ability to change the board of directors and management if their actions work against their best interests or other courses of actions are deemed more appropriate.
Coates' group wanted a voice in the workings of the company and a platform to promote an alternative mechanism of realizing shareholder value, including buying back of stock. instead of accommodating shareholders wishes, Netro management did everything they could to thwart this voice and the democratic process for expressing it.
The experts advocating reform of the system are saying that a major part of what is needed is greater independence of the boards of directors. The practice of hand choosing a board and enacting "shareholders (screwed) rights plans" and other measures to protect shareholders from expressing their legitimate control and a democratic system of checks and balances has undermined investors confidence and made a laughing stock of Wall Street institutions.
Weak minded, ankle-grabbing, investors and institutions are the reason this system has grown so far out of line an why, despite a valiant effort, the Coates proxy did not meet with resounding success. Since the time of the proxy Netro stock has continued moving down. There is still no clear vision from the company about how they will grow large enough to justify the huge amount of capital that has been entrusted to management and the brain-dead board of directors imo.
I think that it is fairly safe to assume that Coates et al lost the proxy fight. I am disappointed, as are others here on the Board. My ONLY hope is that the current slate of directors -- clearly designated for there submissive nature and obedience to the managment team (a classic '90s aproach) -- realize that their duty is to the SHAREHOLDERS and NOT to the CEO. I pray that they see the writing on the wall and develop "spines". There are a number of hard questions that need to be answered.