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Proxy Access: The Impact of Scholarship

In the SEC’s open meeting on proxy access, Commissioner Casey emphasized that the Commission’s decision to adopt Proxy Access would only lead to greater controversy, and would ultimately be subject to challenge under the Administrative Procedures Act for failure to consider whether there was any significant evidence that proxy access would actually result in greater shareholder returns.

The SEC’s implementing release was rather sizeable, coming in at 400 pages and including nearly a thousand footnotes.  I took a minute to go through the release and collect all the references to law and finance scholarship in the SEC’s rules release and collect them here.  I’m proud to say that one of my articles is included in the list.  For better or worse these articles will have, and have had, an enormous impact on the debate.  Some of them argue strongly in favor of proxy access, some of them argue strongly against proxy access, and some (like the one for which I am cited) offer unique analysis of ancillary results of the rule.  Whatever else this list demonstrates, it certainly shows that SEC staff read the ABA publication The Business Lawyer with some regularity.

I recommend them as mandatory reading for anyone interested in the proxy access debate specifically and on financial regulatory reform more generally.  If you want to know what happens after proxy access, of course, first on your list should be my new piece Defending Against Shareholder Proxy Access: Delaware’s Future Reviewing Company Defenses in the Era of Dodd-Frank.

Here are the academic articles and studies cited by the SEC in the Proxy Access Rule Release:

Stephen M. Bainbridge, A Comment on the SEC Shareholder Access Proposal (2003)

J.W. Verret, Pandora’s Ballot Box, Or A Proxy With Moxie?  Majority Voting, Corporate Ballot Access, and the Legend of Martin Lipton Re-Examined, 62 Bus. Law. 1007 (2007)

Joseph A. Grundfest, The SEC’s Proposed Proxy Access Rules: Politics, Economics, and the Law, 65 Bus. Law. 361 (2010)

E. Norman Veasey and Christine T. DiGuglielmo, How Many Masters Can a Director Serve?  A Look at the Tensions Facing Constituency Directors, 63 Bus. Law. 761 (2008)

Lucian A. Bebchuk, The Myth of the Shareholder Franchise, 93 Va. L. Rev. 675 (2007)

Lucian Bebchuk and Scott Hirst, Private Ordering and the Proxy Access Debate, 65 Bus. Law. 329 (2010)

Lynn A. Stout, The Mythical Benefits of Shareholder Control, 93 Va. L. Rev. 789 (2007)

Michael E. Murphy, The Nominating Process for Corporate Boards of Directors: A Decision-Making Analysis, 5 Berkeley Bus. L. J. 131 (2008)

Andrea Beltratti and Rene M. Stulz, Why did Some Banks Perform Better During the Credit Crisis? A Cross-Country Study of the Impact of Governance and Regulation (July 2009)

Brian R. Cheffins, Did Corporate Governance Fail During the 2008 Stock Market Meltdown?  The Case of the S&P 500 (2010)

Paul Gompers, Joy Ishii and Andrew Metrick, Corporate Governance and Equity Prices, 118 Q. J. Econ 107 (2003)

Benjamin E. Hermalin and Michael S. Weisbach, Endogenously Chosen Boards of Directors and Their Monitoring of the Board, 88 Am. Econ. Rev. 96 (1998)

Lucian A. Bebchuk, Alma Cohen, and Alan Ferrell, What Matters in Corporate Governance?, 22 Rev. Fin. Studs. 783 (2009)

Brad M. Barber, Monitoring the Monitor: Evaluating CalPers Activism (2006)

James F. Cotter, Anil Shivdasani, and Marc Zenner, Do Independent Directors Enhance Shareholder Wealth During Tender Offers? J. Fin. Econ (1997)

David Ikenberry and Joself Lokonishok, Corporate Governance Through the Proxy Contest: Evidence and Implications, 66 J. Bus. 420 (1993)

Lisa Borstadt and Thomas Zwirlein, The Efficient Monitoring Role of Proxy Contests: An Empirical Analysis of Post-Contest Control Changes and Firm Performance, FIn. MGMT (1992)

Ali C. Akyol, Wei Fen LIm and Patrick Verwijmeren, Shareholders in the Boardroom, Wealth Effects of the SEC’s Rule to Facilitate Director Nominations (2009)

David F. Larcker, Gaizka Ormazabal and Daniel J. Taylor, The Regulation of Corporate Governance (2010)

Marco Becht, Patrick Bolton and Ailsa Roell, Corporate Governance and Control, Handbook of the Economics of Finance (2003)

Brett McDonnell, Comment Letter to the SEC

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Full post as published by Truth on the Market on September 03, 2010 (boomark / email).