Mace Security International (NDAQ:MACE) finally agreed to expand its board of directors today in order to avoid a proxy fight with a major shareholder, according to a Schedule 13D/A filing with the SEC. Shareholders are hoping that this move will help unlock value in a stock that has remained stagnant during the past few months.

Lawndale Capital Management, which owns 9.6% of the company, indicated in the past that it believes the problems with Mace's board of directors has contributed to the company's poor operating performance and the decline in its stock price. Mace did not respond until recently when it agreed to hold discussions with the hedge fund and expand its board in order to prevent a proxy fight.

According to a joint press release, "The corporate governance enhancements to be adopted are intended to increase the independent composition and functioning of Mace's Board. As a result of the plan, Mace will migrate to a six-person Board, consisting of five Independent directors, three who are not presently on Mace's Board plus two continuing Independent directors."

In the end, this is great news for shareholders. Greater board independence means that more shareholder proposals to unlock value will be considered while compensation and other board-determined things will be kept under control. Combined, these factors make MACE a stock worth watching!

Related Companies
Napco Security Systems (NSSC)
FFP Marketing Company (FFPM)
Axcess International (AXSI)