WASHINGTON (July 22, 2011) — The U.S. Court of Appeals in Washington today overturned Securities and Exchange Commission (SEC) rules that would have required corporations to provide shareholder access to corporate proxy materials to nominate directors.
“(W)e think the commission has not sufficiently supported its conclusion that increasing the potential for election of directors nominated by shareholders will result in improved board and company performance and shareholder value,” Judge Douglas H. Ginsburg wrote in the court´s 3-0 opinion.
Judge Ginsburg said the SEC failed to respond to concerns that union, state and local pension funds “whose interests in jobs may well be greater than their interest in share value, can be expected to pursue self-interested objectives rather than the goal of maximizing shareholder value, and will likely cause companies to incur costs even when their nominee is unlikely to be elected.”
The court sided with Business Roundtable and the U.S. Chamber of Commerce, which filed suit in September 2010 to invalidate the rule.
This report appeared on the website of Pensions & Investments magazine, a Chicago-based sister publication of Tire Business.