Majority Doesn't "Occupy" ABA

In case you missed it (ABA Declines to Embrace Majority Voting as Default Standard, ISS Governance, 11/2/2011)

The American Bar Association’s (ABA) Corporate Laws Committee has declined a request from the Council of Institutional Investors (CII) to revise the Model Business Corporation Act (MBCA) to make majority voting the default legal standard for uncontested director elections.

In an Oct. 25 letter, A. Gilchrist Sparks, chair of the Corporate Laws Committee of the ABA’s Business Law Section, said the panel considered the investor group’s request but decided that a new review of the MBCA is not warranted “at this time.” The MBCA is the basis for the corporate laws of most states besides Delaware. Section 7.28(a) of the MBCA now sets plurality voting as the default standard for director elections unless a company’s articles of incorporation call for a different standard.

According to the ABA, “The adaptation of majority voting by a significant number of public companies since 2006, and the continuing of additional companies every year, provide evidence that an enabling approach is quite viable for the implementation of majority voting.” The ABA appears pre-“occupied” by concerns of the 1% on this one.

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