October 01, 2015

Proxy Access: Moving to Center Stage?

Directors & Boards

Philadelphia partner Doug Raymond surveys the landscape of the proxy access movement in “Proxy Access: Moving to Center Stage?”

The Directors & Boards column opens with a broad overview of how shareholder elections have historically advantaged incumbent directors while implicitly treating challengers as interlopers. Joining the chorus of voices calling for a level playing field, the Securities and Exchange Commission (SEC) in 2010 adopted proxy access on a 3-3-25 basis – that is, “holders of 3% of a company’s shares for at least three years could use company proxy materials to seek election for up to 25% of the board members.” While the SEC was later found to have exceeded its authority, the since-invalidated initiative continues to have staying power with the New York City Comptroller, as well as a multiplicity of institutional shareholders. In a sweeping analysis, Doug weighs in on the impact of the increasing popularization of the 3-3-25 standard, as well as factors that may complicate the proxy access approach moving forward.

Associate Emily Albertson assisted in the preparation of this column.

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