Discussion of the Securities and Exchange Commission‘s proposed new “proxy access” rule, aimed at giving activist shareholders an easier shot at electing members or slates to boards of directors, can get pretty arcane.
So I was glad to see, in today’s Wall Street Journal, a good primer on 14a-11 and a succinct and quotable quote that, to me, sums up the proposed change. Says lawyer John Finley of the New York firm Simpson Thacher & Bartlett:
It’s the biggest change relating to corporate governance ever proposed by the SEC. Period. It gives activists the ultimate vehicle to express dissatisfaction with a board, the ability to replace board members at the company’s expense.
Business lobbying against the change is ramping up toward the post-Labor Day push. That, of course, is when politicians return to Washington and harvest season begins for the crop of governmental mischief planted earlier in the year.
Maybe we could rename this particular proposal “Proxy Excess.”