October 6, 2005
Voting Requirements cont.
The CorporateCounsel.net maintains a majority voting chart of the companies that have adopted something in this area. Of the 11 companies on the chart, it looks to me that only Automatice Data Processing has adopted a standard with any teeth. ADP's standard provides:
The directors shall be elected by the vote of the majority of the shares represented in person or by proxy at any meeting for the election of directors at which a quorum is present, provided that if the number of nominees exceeds the number of directors to be elected, the directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting.
This I think is a positive development for ADP shareholders and does strengthen ADP's corporate governance. But that's not true for the remaining 10 companies on the chart--they all have adopted Pfizer type standards. Call me a cynic if you want, but I do think it is a sham.
I do agree with Dale's post that the true breakthrough would be a company voluntarily allowing a large shareholder to put a canidate on its proxy so that elections would be contested. The SEC, of course, floated the idea of forcing companies to do this, but only in fairly limited circumstances. The effort faced stiff opposition from big business and apparently died with Chairman Donaldson's departure.
[BTW, I came across the ABA press release referenced below and the majority voting chart referenced above at Broc Romanek's blog (www.thecorporatecounsel.net/blog/index.html). If you're not aware of this blog, I would check it out. It is very informative, especially on developments at the SEC.]
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