In Focus

CII Seeks to File Amicus Brief Asking Delaware Supreme Court Not to Dismiss Derivative Case

CII October 19 filed a motion to permit it to submit an amicus brief in California State Teachers’ Retirement System v. Alvarez, No. 295, 2016, in the Delaware Supreme Court. A corporate bribery scandal and subsequent cover up at Wal-Mart Stores’ Mexican subsidiary led to two competing shareholder derivative suits being filed against Wal-Mart directors, in Arkansas and Delaware. While the Delaware plaintiffs put their litigation on hold to obtain company books and records that could strengthen their case, the federal district court dismissed the Arkansas plaintiffs’ claim. When the Delaware plaintiff’s returned to court, Wal-Mart directors contended the issue had been resolved in the Arkansas case. Initially, the Delaware Chancery Court agreed and dismissed the case, but then issued a supplemental opinion reversing the dismissal. CII’s brief argues that the rule adopted in the reversal “is virtually the only way to ensure that Delaware shareholders will retain a meaningful opportunity” to litigate meritorious derivative claims in a thorough and thoughtful manner.

CII Publishes New Guide to Effective Shareholder Meetings

Read CII’s new guide to effective shareholder meetings, virtual and in-person, “Build a Better Meeting: Five Tips for U.S. Companies Looking to Convene a Shareholder-oriented Shareholder Meeting.” A physical meeting remains a cornerstone of effective corporate governance, and new technology opens the possibility of broader participation. “Build a Better Meeting” provides straight-forward guidance on how companies can strengthen the integrity of this time-honored and valuable event, and ensure its relevance for shareholders.

Investor Groups Refute Myth of Shareholder Proposal “Overload”

In an October 11 meeting with SEC Chairman Jay Clayton, representatives of CII and other investor groups provided data refuting the notion that shareholder proposals are excessively burdensome for U.S. public companies. Their research on proposals filed in 2004-2017 shows that most U.S. companies do not receive shareholder proposals: On average, 13% of Russell 3000 companies received a shareholder proposal in a particular year. Other findings: Large companies were far more likely to receive shareholder proposals, less than 9% of Russell 3000 companies that had an IPO since 2004 have received a shareholder proposal, and few proposals that receive low votes are resubmitted for a third or fourth time.

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CII Priorities

Fair Financial RulesSensible, effective rules safeguard investors and strengthen markets.

Dual-Class StockEach share of a public company's common stock should have one vote.

Majority Voting for DirectorsIn uncontested elections, directors should be elected by majority vote.

Universal ProxyIn contests, investors should be free to vote for the nominees they prefer.

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