Future Corporate Voting

Keith Paul Bishop writes:

Section 951 of the Dodd-Frank Act requires companies that are subject to the SEC’s proxy rules to include in their proxy statements “a separate resolution subject to shareholder vote” to determine whether a shareholder vote on executive compensation will occur every 1, 2, or 3 years.   When the SEC was considering amendments to its rules to implement this requirement, I argued that corporations should be free to use other voting rules such as a Borda count or preference ranking system.  See “Counting The Vote When There Are Three Choices.“   Although the SEC noted my comment (and a similar comment from the Society of Corporate Secretaries and Governance Professionals) in its adopting release, the SEC declined to take up the suggestion.

Bishop goes on to note, with pleasure, that at least two cities are “using a more sophisticated approach to voting.”

It is dismaying that the SEC chose to adopt a system that obfuscates rather than clarifies stockholder preferences.  These and other cities are demonstrating that they can do what the SEC refused to do. (San Francisco And Portland (Me) Do What The SEC Refused To Do, 11/8/2011)

I hope Mr. Bishop will continue to push the SEC on this issue as I have done at CalPERS for many years. When I initially broached the idea, one of the board members essentially said that government employees were too stupid to rank candidates. That member is long gone and attitudes have significantly changed from arrogance to respect.

I suppose that for instant runoff voting (IRV) or something like it to be viable, there first has to be contests with more than two competing candidates. So far, corporations are appear to be a long way off from facing such possibilities, except in very rare circumstances.

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