The ABA Committee on Corporate Laws, on which I serve, today announced proposed amendments to the Model Business Corporation Act re shareholder access to the corporate proxy statement for purposes of nominating directors:
The Committee on Corporate Laws of the American Bar Association Section of Business Law approved proposed amendments to the Model Business Corporation Act regarding proxy access for director nominations and reasonable reimbursement for shareholder expenses incurred in proxy contests for director elections.
The committee will publish these proposed amendments for public comment in the August edition of The Business Lawyer. Following publication, the committee will consider them for adoption.
These proposed amendments will expressly provide a vehicle for the directors or shareholders of corporations in Model Act states to establish their own procedures, through their corporation’s bylaws, to allow shareholder access to the corporation’s proxy statement to nominate directors and to allow shareholders to be reimbursed for reasonable expenses incurred in connection with proxy contests for director elections.
According to committee chair Herbert S. Wander, “the committee strongly believes that the best interests of all constituencies will be served by providing for private ordering by the board of directors and the shareholders in the nomination process.” He further noted that “these proposals demonstrate the dynamic and historical role state corporation statutes have had and are having in the positive development of corporation law in the United States."
As regular readers know, I'm no fan of shareholder access. I would much prefer the private ordering approach exemplified by the MBCA proposals to the top down, one size fits all approach the SEC is likely to take at the federal level.
