A paper coauthored by 2 SEC staffers argues that:
We use a unique setting to study the tradeoffs between universal regulatory mandates and private contracting in the field of corporate governance. Events surrounding the legal challenge of a 2010 proxy access rule allow us to benchmark the market’s expectation of the benefits of universally mandated proxy access even though this rule never came into effect. At the same time, a 2010 rule amendment facilitating shareholder proposals for proxy access opened a new channel for proxy access through "private ordering." We document that this private channel has been active, spawning about 160 proxy access proposals, and use the unexpected announcement of a major private ordering initiative to identify a 0.5 percent increase in shareholder value for the targeted firms. However, our findings also underscore that private ordering may lead to a second best outcome. We find that proponents do not selectively target those firms that were expected to benefit the most from universally mandated proxy access, and that tailoring of proposal terms is limited. Moreover, management is more likely to challenge proposals at firms that stand to benefit more. Overall, we find that private ordering creates value, but it may not efficiently deliver proxy access at the firms that need it most.
Bhandari, Tara and Iliev, Peter and Kalodimos, Jonathan, Public Versus Private Provision of Governance: The Case of Proxy Access (July 24, 2015). Available at SSRN: http://ssrn.com/abstract=2635695
But what the paper does NOT prove is that SEC mandated proxy access would be superior. The SEC's effort to mandate proxy access entailed a one size fits all approach with no opportunity for tailoring to specific firm needs (except that shareholders could vote for enhanced access) and no opt out option for firms that simply don't need proxy access for effective corporate governance.
