As we should all know by now, last week, on July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. For the complete text, click here or click here
Strengthening Corporate Governance through Proxy Access is specifically addressed. See Title IX – Investor Protections and Improvements to the Regulation of Securities, Subtitle G – Strengthening Corporate Governance, Sec. 971. Proxy Access. Proxy access makes it easier for shareowners to nominate their own candidates for corporate board directors by letting them place their nominees for director on the company’s proxy card. Currently, the only way that shareowners can present alternative director candidates at a
In particular, the Proxy Access provision, § 971, amends Section 14(a) of the Exchange Act by adding a new subsection (1) that explicitly gives the SEC the authority to issue rules permitting shareholder access to proxy materials in order to nominate candidates to the Board of Directors. As previously addressed in a Pomtalk post on July 15, 2010, entitled, “SEC Seeks Comments on Proxy System,” the SEC is currently seeking public comments on the U.S. proxy system and asking whether rule revisions should be considered to promote greater efficiency and transparency.
More specifically, Title IX – Investor Protections and Improvements to the Regulation of Securities, Subtitle G – Strengthening Corporate Governance, Sec. 971. Proxy Access, provides:
(a) PROXY ACCESS … The rules and regulations prescribed by the [SEC] … may include –
(A) a requirement that a solicitation of proxy, consent, or authorization by (or on behalf of) an issuer include a nominee submitted by a shareholder to serve on the board of directors of the issuer; and
(B) a requirement that an issuer follow a certain procedure in relation to a solicitation described in subparagraph (A).’’.
(b) REGULATIONS.—The Commission may issue rules permitting the use by a shareholder of proxy solicitation materials supplied by an issuer of securities for the purpose of nominating individuals to membership on the board of directors of the issuer, under such terms and conditions as the Commission determines are in the interests of shareholders and for the protection of investors.
(c) EXEMPTIONS.—The Commission may, by rule or order, exempt an issuer or class of issuers from the requirement made by this section or an amendment made by this section. In determining whether to make an exemption under this subsection, the Commission shall take into account, among other considerations, whether the requirement in the amendment made by subsection (a) disproportionately burdens small issuers.
See http://thomas.loc.gov/cgi-bin/query/F?c111:6:./temp/~c111Q9Hs5H:e1747149
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