Many financial experts these days recommend we should not let the companies hoard cash. The mandate seems to be - if you don't have good projects to invest in , then just give back the cash..."It belongs to me". The investor expects cash rich companies to return the cash to stock holders either by stock buy-back(in turn appreciating the share price) or by issuing dividend payments.
In the short term, this may make stock holders feel super-empowered and liberated with their only powerful friend's help (Institutional investors as described by Danny Devito in "Other people's money"!). But placing such pressure may severely hurt the long term prospects of companies and the economy.
When institutional investors pressurize boards to give back cash or do something with it, the corporations are left with very less to time to evaluate all possible investment options. Like everything else even good investment decisions need time(there are only so many decision makers in any corporations). Unfortunately, given the situation the corporations end up either taking on bad projects or making hurried acquisitions (many times overpaying !!), and as expected the stock goes south.
Powerful, experienced, brave and reputed people on the board may go a long way in enduring such external pressures from investors and manage to take the decision in the best interest of the stockholders and the corporation. But again, there are only so many great leaders. Corporate governance scores of organizations may be a greatly effective indicator of the strength of an organization to endure such pressures and come out financially victorious and give the best possible returns to its stock holders.