We will, over the next few days, post on the shareholder access proposals made by the SEC.  The time frame for comments is coming to a close (somewhere around the end of September).  The SEC has two proposals under circulation.  One would allow and one would not allow shareholders to include in the company's proxy statement a proposal to amend the bylaws to sometimes require that a shareholder nominee for the board be inserted in the proxy.  

We note first the posture of the Commission with respect to the two proposals.  They arose out of a divided Commission, with commissioners Cox, Atkins and Casey favoring the non-access model and commissioners Cox, Campos and Nazareth favoring the access model.  This left Chairman Cox the swing vote.  From public statements (both in testimony and in Senate hearings), Chairman Cox more or less indicated that he favored the access model approach, albeit in a manner designed to be gradual, thereby avoiding any significant disruption to the proxy process. 

But all of that changed with the announcement by Commissioner Campos that he was stepping down.  As we have written, his position will almost certainly be filled with a nominee coming from the Democrats in the US Senate (rather than a Democrat selected by the present administration).  Given the views expressed by Senator Dodd on this issue, any Democratic nominee will likely be supportive of some version of the access proposal.  Nonetheless, there is at least some doubt that a new commissioner will be appointed and approved by the time the access proposal is considered by the full Commission.

That leaves a four person Commission to resolve the matter.  Two, Atkins and Casey, oppose access.  Nazareth favors it. Even this lone vote, however, is uncertain.  Latest reports indicate that Nazareth, who's term expired in June, may leave the Commission before the year's end, perhaps even before the vote on the access proposal. 

For a discussion of these views, go to the post here.  So far, Chairman Cox has indicated support for access, something he repeated in Senate testimony.  That would leave the Commission tied two to two.  This would, ironically, be the best position for supporters of access.  In effect, it would leave in place the holding of the Second Circuit in AFSCME which allowed these proposals.  But at the same time, it would leave the Commission without any rule and Chairman Cox avowed in Senate testimony that there would be a rule.

This suggests that Cox may side with Atkins and Casey, at least if the paramount issue is to obtain a rule.  Alternatively, to bring them around, he may agree to more severe restrictions to access in the existing proposal.  All of this means, as one lawyer put it nicely, the access proposal "went from iffy to negligible."

So, we write in a more uncertain time.  Nonetheless, these proposals are very important and warrant some analysis and thought.  We will undertake that over the next few weeks.