Right now, pending before the District Court for DC, is a challenge by the Business Roundtable on a new rule, promulgated by the SEC under marching orders of Dodd-Frank, that mandates access to corporate proxy materials for certain larger and long-term investors. Meaning, they get corporate campaign financing for their own director candidates. Before 14a-11, normally only management could nominate directors; they reaped the benefits of access to corporate coffers to finance campaigns, and they don't suffer the collective action problems of a diversified shareholder base.
"Proxy access" is the jargon. The rule under fire: Rule 14a-11.
Why do we care? Proxy access for larger, long-term investors can pressure corporate management to govern more in their interests -- hopefully, in a long-term, sustainable manner. Which is good for children and other living things.
The thing is, advocates of proxy access had tried before to gain keys to the executive boardroom suite through an amendment of Rule 14a-8, which allows shareholders to propose bylaw amendments. They could, if they got enough support at corporate general meetings, amend the company's by-laws to provide for shareholder proxy access -- in terms more restrictive, likely, than those currently mandated by 14a-11.
But the business roundtable fought it tooth and nail.
Is this either "take no prisoners," or a "D'oh" moment???
thanks to the folks at The Race to the Bottom for this one.
