Corporate Governance

Heroes and Villains

By Harvard Law School Program on Corporate Governance

It appears Mr. Olson is sadly uninformed when–in my opinion–he inappropriately labels former Securities and Exchange Commissioner Roel Campos as a “villain” for his role in the SEC rulemaking on proxy access.

Indeed, after the Second Circuit’s decision in AIG, it was Commissioner Campos who brought various parties together in an attempt to bridge the gap that existed between investors and management. Unfortunately, this issue had taken on an emotional, almost fundamentalist tone driven more by political ideals than by common sense. When battle lines were drawn and after the SEC proposed two different rules last summer, I attended a conference at which Commissioner Campos publicly spoke out against both proposals, a stance most investors agreed with. It was a view expressed constantly in thousands of comment letters investors sent to the SEC, only to find their voices falling on deaf ears and their views ignored. Campos also urged the SEC to leave things as they stood after the Second Circuit’s decision, as that was truly best for both sides in this heated debate.

By passing the non-access rule, three of the four current Commissioners have only served to increase the likelihood of open warfare, and perhaps litigation, between shareholders and management. As Chairman, Christopher Cox had the simple choice whether to bring proxy access to a vote or not, and then he alone had the choice as to how he would vote. Indeed he was very decisive when he chose to bring the issue to a vote, and then voted for non-access. He unequivocally made his views on shareholder access very clear. While he speaks of favoring access for investors, his actions speak much louder than any spoken words, and show that he truly opposes shareholders receiving equal rights and access with management to the proxy. Even if Roel Campos had continued as Commissioner, the end result under the current Commission would not have changed. Cox had the chance to vote with Commissioner Nazareth and made his own decision not to. That is a fact beyond argument.

Full post as published by The Harvard Law School Corporate Governance Blog on December 17, 2007 (boomark / email).