On the heels of the elimination of broker voting in director elections, the New York Stock Exchange has announced the
creation of an independent advisory commission to examine U.S. corporate governance and the overall proxy process.
The advisory commission will be led by Larry Sonsini, chairman of the powerhouse law firm Wilson Sonsini Goodrich & Rosati, and will take a "comprehensive look at strengthening U.S. best practices for corporate governance and the proxy process," according to a NYSE press release.
Sonsini chaired the 2005 NYSE
Proxy Working Group that recommended designating all director elections as non-routine matters, effectively banning broker discretionary votes, which previously allowed for uninstructed shared under NYSE Rule 452.
The NYSE rule proposal implementing that recommendation was
finally passed by the Securities and Exchange Commission in July. The rule change is effective for shareholder meetings on or after Jan. 1, 2010
Meanwhile, SEC Chairman Mary Schapiro has said the agency will conduct its own review of proxy issues in light of the NYSE rule change, which is expected to have a significant effect, particularly on smaller companies. Another pending SEC proposal to facilitate shareholder access to corporate proxies to nominate directors would also have a major impact on governance, if approved.
The NYSE advisory commission members are expected to be announced soon.