Shareholder Access Update: Who's that knockin' at the boardroom door?

There have been several recent articles on the SEC's proposed proxy access rule, Rule 14a-11. If adopted, this rule would allow large shareholders to nominate director candidates and have the candidates included in management's proxy statement for the company's annual meeting.

A Wall Street Journal article last week (subscription required for full article) reported that ". . . the measure looks like it will be passed by the Securities and Exchange Commission in November." The article describes efforts by the U.S. Chamber of Commerce and others to block the measure, but reports that ". . . most opponents expect the measure to pass." The article states that many corporate comment letters are suggesting a weakened version of the measure rather than opposing it altogether.

However, this post by Dave Lynn in the Corporate Counsel blog last Friday puts the proposal's status in perspective and raises doubts that shareholder access is a "done deal". Lynn refers to several interesting comment letters, including this comment letter from several prominent former SEC staff members, urging the Commission to focus on other, more pressing regulatory matters. The Corporate Counsel post points out that "this is a road that we have all been down before", basically stating that it's too soon to know where this will end up. We all need to stay tuned.

As always, you can refer to the ON Securities Cheat Sheet for information on this and other proposals before the SEC, as well as pending legislation.