From the WSJ:
Securities and Exchange Commission Chairman Mary Jo White, speaking in Chicago on Thursday, said the SEC is developing rules that would make it easier for shareholders to vote on board candidates offered by investors, in competition with those pushed by the company’s management.
The possible new rules, which are at an early stage of development, focus on what is known as a “universal ballot,” a single voting form in contested corporate elections. Currently, voters in contested elections receive two sets of ballots, each featuring a rival slate of board candidates.
For investors and governance advocates, the proposed rules could bolster activist campaigns, as the universal ballot is widely seen as more helpful to outsiders trying to get a seat on a board, especially in seeking the votes of smaller investors.
The problems with this proposal are numerous:
- It's a further federalization of issues best left to state corporate law.
- It's another example of how the SEC is tilting the playing field between directors and shareholders in favor of activists.
- As usual, many of the users will be activist union and state or local government pension funds seeking to advance a political agenda.
