The Council of Institutional Investors filed a brief strongly supporting the Securities and Exchange Commission’s (SEC) “proxy access” rule, rebutting claims of business groups seeking to overturn the rule.
The Council’s CII TIAA-CREF et al amicus brief 01-27-11, filed with TIAA-CREF and 14 other pension funds, was submitted January 27 in the U.S. Court of Appeals for the D.C. Circuit, in Business Roundtable and Chamber of Commerce of the United States of America v. Securities and Exchange Commission.
“Proxy access will make companies more responsive to their shareowners and more vigilant in their oversight of management,” said Ann Yerger, executive director of the Council of Institutional Investors, an association of public, union and corporate pension funds with combined assets in excess of $3 trillion. “This basic shareowner right is widely accepted in many countries. U.S. investors deserve this same, fundamental protection.”
Proxy access gives shareowners a meaningful voice in corporate board elections by letting them place their nominees for director on the company’s proxy card when they are dissatisfied with the board and want to run their own candidates. This allows investors to avoid the often-prohibitive cost of distributing their own proxy materials to other shareowners. The SEC last August approved a rule granting certain long-term investors proxy access at U.S. public companies. But the rule was not put into effect because of the Business Roundtable-Chamber lawsuit.
The Council’s brief argues that the benefits of proxy access far outweigh the costs, citing enhanced communication between investors and management in countries where proxy access is permitted. The increased dialogue “keeps directors in touch with market sentiment which strengthens board independence, reduces risk surprises and improves corporate governance,” the Council and pension funds contend. The brief also dismisses business claims that the proxy access rule will saddle corporate boards with special-interest nominees
See also, CalPERSattachment-CIIpublicationEqualAccess (an attachment to a CalPERS Board meeting agenda from years ago).