Home | Business News | Browse by Publication | D | Directors & Boards

Shareholder nominations are coming: be ready for your shareholders to use your proxy statement to propose their own director nominees.

Article Excerpt
Proxy access, for better or worse, is coming. The controversial right of a shareholder to require a company to include in the company's own proxy materials the shareholders' nominees for directors alongside the board's nominees is an issue that public company boards will have to address in the near future. While some of the details are still uncertain, it seems likely that we are entering a new world of proxy practice where shareholder nominees to a company's board will be an increasingly frequent part of the landscape.

Shareholders today have the right to nominate candidates for election as directors and then solicit proxies for them. However, currently they have to prepare and distribute their own proxy materials and may not piggyback onto the company's own proxy statement. This makes it a time-consuming and expensive task for a shareholder to promote director nominees in a proxy contest. And, since most shareholders are not that interested in proxy contests of any kind, a dissident suffers a marked disadvantage by being kept out of the company's official materials. Including shareholder nominees in the company's proxy statement would shift the cost of promotion from the shareholder to the company. Equally important, it would give election contests a greater imprimatur and likely lead to more victories for shareholder nominees.

Delaware's approach...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!