Corporate Governance

SEC rejects proxy access

By Josh Silverman

Make no mistake -- Chairman Christopher Cox and the SEC are out to protect corporate interests, not shareholders.  In a rushed vote, Cox and the SEC approved a rule that will allow companies to deny shareholders the right to put their own director nominees on corporate ballots.  As a result, companies can close off the prospect of ousting entrenched directors by anything but a full blown proxy contest, which is prohibitively expensive in most cases, and face no reprisal from the SEC.

Investor advocate and former SEC chief accountant Lynn Turner sees the move as part of a larger attack on shareholders.   "We have heard a lot of talk from Chris Cox in the past, and now we get to see how he walks," he said.  "This could be the least investor-friendly SEC we've seen in four decades."  Annette Nazareth, the sole Democrat on the commission, opposed the rule, calling it "an unfortunate step backward."  Nazareth explained that  "responsible management need not fear its shareholders."  We couldn't agree more.  As owners of the corporation, shareholders are entitled to have their votes heard, not thwarted by Byzantine rules designed to protect entrenched directors.

Full post as published by PomTalk on December 04, 2007 (boomark / email).