The recent decision by the SEC is not to seek a rehearing of the Appeals Court ruling staying process access now appears to set in motion a move toward the use of the shareholder proposal process to advance the proxy access concept.

An Access Free-for-All?

It is likely that some labor and public funds will file shareholder resolutions at specific issuers seeking access to the proxy. Also the so-called individual shareholder gadflies are expected to file proposal as well. Issuers however, should not expect a flood of these proposals in 2012. The governance advocate institutional investors will tread carefully and be quite selective in their targets – mega and large capitalization companies with poor performance or visible governance problems or scandals – while the hedge fund community, if they use this tactic at all, are more likely to target small-cap issuers.

Figuring into the equation is how ISS and Glass Lewis will treat these proposals. Each firm has essentially stated that their review will be on a case-by-case basis.

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