Shareholder activist pension funds plan to continue to pursue proxy access, despite a U.S. Court of Appeals ruling overturning SEC rules that would have required corporations to provide shareholder access to corporate proxy materials to nominate directors.
“We continue to strongly support a uniform proxy access rule,” Jeff Mahoney, general counsel, Council of Institutional Investors, Washington, said in an e-mail.
“We are uncertain as how the (Securities and Exchange Commission) will respond to the court's ruling. We, however, believe the court got it wrong, and will encourage and support commission efforts to respond to the process issues raised by the court.”
Amy Borrus, CII deputy director, said in an interview, “We would hope the SEC would remain committed to a proxy access rule and address concerns raised in the ruling. The council is ready to help out as needed.”
Thomas Quaadman, vice president of the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness, Washington, said, “Proxy access … was limited to an extremely small number of shareholders, which is one thing the court recognized. It was about super rights for a slim majority of shareholders.”
“We believe governance rules of this nature should be governed by state law, not federal law,” Mr. Quaadman said.
Delaware, a haven for incorporation, in 2009 adopted a framework to allow companies to amend bylaws to permit proxy access, Mr. Quaadman noted.
The chamber wanted to see how that change worked out before the SEC embarked on an access rule, he said.