Thursday, October 4, 2007
Thirty-nine law professors filed a comment letter with the SEC in favor of placing shareholder-proposed bylaw amendments on the corporate ballot. The comment letter urges the SEC not to adopt either one of the two proposals it is now considering to allow companies to exclude some or all shareholder-proposed bylaw amendments concerning shareholder nomination of directors. The SEC, it argues, should avoid producing impediments to shareholders' exercise of their right under state law to initiate bylaw amendments concerning shareholder nomination of directors. According to Professor Lucian Bebchuck, there is substantial disagreement among the law professors submitting the comment letter regarding the substantive merits of proxy access bylaws, and thus as to whether shareholders would benefit from adopting such bylaws. All members of the group are unanimous, however, in their belief that shareholders should be allowed to make the decision on this subject for themselves, and that companies should not be allowed to make the decision for them by excluding proposed bylaw amendments from the corporate ballot.