|  | | 2006 News and Press Releases | | |
HEADLINE NEWS:
SEC Democrats Balk At Plan; The Honeymoon For Christopher Cox May Soon Be Over At The Securities And Exchange Commission
Staff Writer - Deal.com
Securities Mosaic. December 4, 2006
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EXCERPT: At issue is a federal appeals court's Sept. 5 ruling that the SEC was wrong to let American International Group Inc. exclude from its proxy an investor proposal intended to make it easier for shareholders to nominate alternative director candidates on corporate ballots. To resolve the difference between the SEC's interpretation of the rules and the court's, Cox's most viable options would force him to choose between one option sure to be opposed by the SEC's two Democrats and another that faces resistance from at least one of his GOP colleagues. "It will be difficult to get unanimity," SEC Commissioner Roel Campos told reporters after giving a speech to the Consumer Federation of America in Washington. SEC observers expect Cox to introduce a draft rule on Dec. 20 clearly spelling out that companies may block shareholder groups from placing director candidates on company proxy cards. Democratic SEC Commissioners Campos and Annette Nazareth oppose that idea and support giving shareholders the ability to nominate one or two candidates on the company proxy documents. Republican Commissioner Paul Atkins is likely to be opposed to their suggestion. "I think there are others on the commission that don't want shareholder access at all, who view that as sort of a danger to the conduct of business, and I think that is totally wrong," Campos said.
The other Republican commissioner, Kathleen Casey, has not voiced her views publicly.
Campos said he was open to some compromises, including letting the court decision sunset after a one-year pilot period so that investors and the business community can observe the extent to which shareholders attempt to nominate their own director candidates on corporate boards and what that could mean for those businesses. The corporate community contends that giving shareholders the ability to nominate one or two of their own director candidates on a company proxy card could give special interests such as labor unions and environmentalists too much power on boards. Such a situation could also violate the corporation's ability to comply with its fiduciary duties to shareholders. |
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