SEC Tables Consideration of Proxy Access

During the evening of December 6, the Securities and Exchange Commission published its agenda for the open meeting scheduled for December 13, 2006. This past September, in AFSCME v. AIG, the Second Circuit held that shareholders had the right to introduce proposals to adopt proxy access regimes at their corporations.

Following the decision, the SEC immediately announced that it would consider amending Rule 14a-8 to address the Second Circuit’s decision. In October, however, the SEC deferred consideration of any proposed amendment to Rule 14a-8 until the open meeting scheduled for December 13. From the agenda published for next week’s meeting, it is apparent that the Commission has again decided to delay its consideration of this subject.

Individuals affiliated with the Program have over the past several years actively participated in the debate over proxy access. This involvement includes:

-An amicus curiae brief in the AFSCME v. AIG case itself, filed by Lucian Bebchuk, Allen Ferrell, Reinier Kraakman, Mark Roe, and Guhan Subramanian, in support of shareholders’ right to introduce proxy-access proposals;

-A letter on this subject sent to the SEC by several members of the faculty and other law professors;

-Articles by Professor Lucian Bebchuk in support of proxy access reform, including The Case for Shareholder Access to the Ballot and The Myth of the Shareholder Franchise; and

-A Symposium on Proxy Access and Corporate Election Reform hosted by the HLS Program on Corporate Governance, featuring, among others, Lucian Bebchuk, Richard Breeden, John Castellani, John Coffee, Robert Clark, Harvey Goldschmid, Joseph Grundfest, Jamie Heard, Orin Kramer, Robert Todd Lang, Martin Lipton, Robert Monks, Charles Nathan, Floyd Norris, Robert Pozen, Michael Price, James Rogers, Steven Rosenblum, Damon Silvers, Leo Strine, Sarah Teslik, Ralph Whitworth, and John Wilcox.

Given the importance of the subject, we’ll all continue to follow closely what the SEC does–and does not do–with respect to proxy access.