Tag Archive for ‘Proxy Access’
Corporate governance expert Paul Strebel says there’s need for a “fundamental change” in the way board directors are nominated, with members of the nominating committee drawn from a more diverse group of stakeholders than has been the case. “To improve public trust in business, the search for board directors has to extend beyond the world of top executives,” he says.
The U.S. Court of Appeals for the District of Columbia Circuit vacated Securities and Exchange Commission rules adopted in 2010 designed to give shareholders the ability to nominate directors through corporate proxy materials. The court ruled that the SEC “acted arbitrarily and capriciously for having failed once again…to adequately assess the economic effects of a new rule.”
The study found that in a one-day “event window” around October 4, when the SEC announced delay of the shareholder proxy access rule, share prices of companies that would have been most exposed to shareholder access declined significantly – about 42 basis points – compared to share prices of companies that would have been most insulated from the rule.
Women serving on corporate boards are far more likely than their male counterparts to favor increased boardroom diversity, new regulations for executive compensation, proxy access for shareholders and enhanced risk management, according to a new survey of corporate directors.
The Securities and Exchange Commission put the proxy access movement on hold, granting a request by business groups to stay the SEC’s recently adopted rules giving shareholders a procedure to put nominees on the ballot at corporate elections for directors. The decision likely makes proxy access moot for the 2011 proxy season.
The U.S. Chamber of Commerce and the Business Roundtable filed a legal challenge to the recently issued Securities and Exchange Commission rules on proxy access. The groups have asked the SEC to stay adoption of rules giving certain shareholders the right to include their nominees in corporate proxy materials. The rules have been scheduled to take effect Nov. 15, 2010.
A New York Stock Exchange commission concluded that “failures of corporate governance were not the sole reason for the financial crisis of 2008” and that most public companies “are well governed, with hard-working and ethical boards and shareholders.” The panel also called for new standards for proxy advisory firms.
Given the green light by Congress, the Securities and Exchange Commission approved and released a long-awaited rule on procedures under which shareholders can get their nominees for directors included in corporate proxy materials. Under the new rule, shareholders seeking access to proxies would have to own at least 3% of the total voting power entitled to vote at an annual meeting.
As the Securities and Exchange Commission prepares to deal with a deluge of new rule-making tasks tied to the Dodd-Frank financial reform law, agency Chairman Mary Schapiro announced a new system for soliciting public input on rules. “We are inviting public comment even before the various rules are proposed and before the official comment periods have begun,” she said.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, widely considered to be one of the most comprehensive reforms of the U.S. financial industry in years, was signed into law on Wednesday. While many provisions of the Act relate primarily to banks and the financial regulatory system, the new legislation will also have a significant impact on corporate governance and executive compensation practices for public companies in general.