|  | | 2007 News and Press Releases | | |
HEADLINE NEWS:
S.E.C. Bars Investors’ Directors
Eric Dash
The New York Times. November 29, 2007
_________________________________________________________________________
EXCERPT: The Securities and Exchange Commission ruled yesterday that public companies could block investors from putting director candidates on corporate ballots, a major setback for shareholders seeking a greater say in boardroom affairs. In a 3-to-1 vote split along political lines, the three Republican members, including the chairman, Christopher Cox, supported giving corporations the right to bar director candidates nominated by shareholders from proxy ballots. The lone Democrat, Annette L. Nazareth, voted against the measure, saying it “stands in the way of shareholders’ rights to elect directors.” The vote ended nearly a year of debate between business groups and union and pension funds over the influence investors should have, which generated more than 34,000 letters to the agency. In its vote, the S.E.C. essentially codified the status quo, which allows companies to ignore shareholder proposals on the election of directors. In doing so, commissioners turned down a proposal that would have made it cheaper and easier for dissident investors to elect candidates. Corporations, like Bank of America and General Motors, said that additional influence could be disruptive. Mr. Cox has pledged to consider the issue again next year, but despite several last-ditch efforts by pension funds, he decided to move ahead with the vote yesterday to eliminate the need to go to court to clarify the issue. “Doing nothing would put all investors at risk,” he said yesterday. “Doing nothing at this time would enable an easy run around the commission’s required disclosures and our antifraud rules in proxy contests.” Investor advocates, however, criticized the ruling, calling it the latest policy initiative led by Mr. Cox that has failed to benefit shareholders. Many critics believe there is little chance for the ruling to be reversed and suggested Mr. Cox’s insistence on holding the vote because of lawsuits was a political red herring. “This is a serious wrong turn from the commission,” said Rob Feckner, the president of the California Public Employees Retirement System, one of the nation’s largest pension funds. “In effect, the commission has turned back the clock on corporate democracy by withdrawing a shareholder right that is taken for granted in other developed countries.” |
|
|
