While the courts are now weighing the long-expected legal challenge to the Securities and Exchange Commission’s controversial new proxy access rule, lawyers are advising companies to take no chances and begin preparing for its potential effects on director elections during the next proxy season.
Nobody expects to see a flood of shareholder nominations when Rule 14a-11 takes effect on Nov. 15 anyway. But barring some formal stay from the courts, companies need to plan for its arrival. That means assembling a team to handle the process, reviewing the corporate bylaws for any changes that might be necessary in light of the new rules, and perhaps building extra time into their proxy planning calendars, according to panelists at a Sept. 28 event hosted by law firm Baker & McKenzie.
