Just because you get a shiny new hammer doesn’t mean everything in your house is suddenly a nail.
Yet that is the impression we get from the breathless pronunciations regarding the new proxy access rules, even as the SEC put them on hold while a court considers a legal challenge to the requirement. Seemingly every law firm with a corporate practice—and quite a few without one—has sent out its analysis. Proxy solicitors declare: “the Rubicon has been crossed.” One law professor is so concerned about proxy access that he has circulated a list of counter-productive ways to “defend” against it, including having every other director resign if a single director were to be selected through proxy access, even though he admits that such action would destroy the corporation. Shareholder advocates crow that proxy access is a major step toward accountability, while the Chamber of Commerce calls it “a giant step backwards.” The Chamber teamed up with the Business Roundtable to challenge the legality of the new rules in court.
