SEC Commissioner Paredes' View on Shareholder Access

Commissioner Paredes shared his dissenting view on the new shareholder access proposal in a speech before the Chanber of Commerce yesterday.  The text of the speech is here.  He argues that states are best able to tailor approaches to the corporate law, in particular that Delaware has an enabling statute intended to provide shareholders with flexibility in designing their relations with management. He points to DGCL new sections 112 and 113 as examples of Delaware's flexibility.    One might also point to the new North Dakota Public Company chapter of its corporation code as an example of state flexibility and tailoring.  Its section 10-35-08 provides for shareholder access to the corporate proxy on terms largely similar to those proposed by the SEC.

In his speech Commissioner Paredes reiterates his own proposal:  amending Rule 14a-8(i)(8) to permit shareholders to include in the company's proxy materials a bylaw proposal that would allow shareholders proxy access for nominating directors so long as the company's jurisdiction of incorporation has adopted a provision explicitly authorizing a proxy access bylaw (for example, DGCL Sec.112).

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