… though not completely. Two lobbying organisations for corporations won a partial victory in the US Court of Appeals, striking down the proxy access rule from the Securities and Exchange Commission. The Business Roundtable and the US Chamber of Commerce wanted to block the rule from coming into effect next year. They argued the rule – which gives shareholders meeting certain conditions the ability to nominate directors and have the companies pay to send out voting materials to shareholders – was unconstitutional. The Court of Appeals justices didn't get that far into the case, however. They overturned the proxy access rule on a technicality. They agreed with the plaintiffs that the SEC "failed adequately to consider the rule's effect upon efficiency, competition, and capital formation". That means the SEC could come back with a new rule after what would be, in effect, an economic impact statement. Dodd-Frank unhappy anniversary: The ruling came almost exactly on the anniversary of the Dodd-Frank "Corporate Responsibility" Act, which had mandated the SEC to do something along these lines. That "something" involved reheating that rule that been thrown out before – also after a lawsuit by corporate lobbyists – in the aftermath of the collapse of Enron. While some shareholder activists might be disappointed to lose this way to prise open the corporate boardroom, others aren't so sure. Adam Emmerich, a partner in the corporate department at Wachtell, Lipton, Rosen & Katz, a law firm that has taken strong stances on corporate governance, wrote: "we believe this is a positive development for American corporations and their shareholders." Proxy access wasn't necessary or even beneficial, he contended, adding: "we do not expect this ruling to decrease the frequency of proxy contests."
Source documents: The court ruling is a 21-page pdf file. The Emmerich statement in on the Harvard Law School blog.
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