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September 14, 2011
Investors Continue to Press SEC on Proxy Access
by Robert Kropp
Institutional investors with $2 trillion in assets urge the Securities and Exchange Commission to
issue regulations allowing proxy access.
After the US Court of Appeals in Washington DC struck down the Securities and Exchange Commission's
(SEC) rule on proxy access in July, the Council of Institutional Investors (CII) wrote
to the Commission, stating its support for an appeal of the ruling.
would permit shareowners who have owned at least three percent of a company for at least three
years to have their nominees for boards of directors included in corporate proxy materials.
Last week, the SEC announced that it would not appeal the Court's decision. Chairman Mary
Schapiro stated, "I remain committed to finding a way to make it easier for shareholders to
nominate candidates to corporate boards. At the same time, I want to be sure that we carefully
consider and learn from the Court's objections as we determine the best path forward."
the Court's decision, Judge Douglas Ginsburg wrote that 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."
Now, a coalition of pension funds and institutional investors, representing more than $2
trillion in assets, has added the voices of 14 institutions to the controversy. In a statement
released yesterday, the investors wrote, "We have accumulated far too many examples of
unaccountable directors on boards which have ignored shareowner proposals, fallen short of their
duty to oversee management and, too often, overcompensated CEOs and senior executives relative to
performance results when they failed to deliver shareowner value."
shareowners with substantial stakes in the company the right to nominate directors would add a
powerful tool to keeping boards accountable and companies financially healthy," the statement
continued. "We strongly urge the SEC to issue new rules on full proxy access and continue its
commitment to providing long-term shareowners with the right to have a say in who runs the
companies they own."
Investors supporting the statement include the California Public Employees' Retirement System (CalPERS), the
California State Teachers' Retirement System
(CalSTRS), and the New York State Office
of the Comptroller.
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