Appeals Court Strikes Down "Proxy Access" Rule

An SEC rule that would have required public companies to include in their proxy statements for the annual meeting the nominees of certain long standing shareholders has been invalidated by a federal appeals court. In a unanimous three-judge ruling, The US Court of Appeals for the DC Circuit said the SEC didn't take the views of commenters on the then-proposed rule, known as "proxy access," into account, in particular the concern that special interests such as unions and local governments might hijack the access rule to pursue interests not necessarily in line with shareholder value. The SEC's view is that the rule enhances already existing rights of shareholders to nominate and elect board members. The case was brought by the Business Roundtable and the US Chamber of Commerce. The SEC says it's examining whether they will appeal from here. My view: shareholder rights are important but given the overwhelming amount of litigation brought by shareholders against public companies in this country so disproportionate to the rest of the world I am not bothered that this extra power granted to them appears to be headed away.

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