Council of Institutional Investors

Universal Proxy

CII believes that in contested director elections, management and dissidents should provide shareowners with proxy cards that list all director nominees.

"Universal" proxy cards would let shareowners vote for whomever they wish to represent them on corporate boards. This is a vital consideration in proxy contests, since board seats and in some cases board control are at stake. It would also make for a fairer, less cumbersome voting process. 

On October 26, 2016, the SEC proposed rulemaking to institute this much-needed reform. CII has made available a brief FAQ on why it supports the commission's proposal.

CII had asked the SEC to amend its rules so that each side in a proxy contest can distribute universal proxy cards listing all director nominees (see Correspondence below).

Currently, shareowners have limited ability to vote for a mix of management and dissident nominees. This is because the SEC’s “bona fide nominee” rule, adopted in 1966, requires opposing sides in a proxy contest to obtain consent before listing opposing candidates. The SEC’s 1992 “short slate” rule provides a carve-out from the consent requirement when a shareowner nominates candidates representing a minority of the board. In such cases, dissidents can list their preferred combination of shareowner and management nominees. But the short slate rule does not allow for full “mix and match” capability.

The SEC Investor Advisory Committee has recommended that the commission explore relaxing the bona fide nominee rule.

Resources & Advocacy
CII corporate governance policy on universal proxy cards
Dec. 28 2016 CII comment letter to SEC on universal proxy
March 5, 2015 CII letter to SEC on universal proxy
August 21, 2014 CII Advisory Council members' letter to SEC on universal proxy cards in contested elections
July 23, 2014 CII Letter to Subcommittee on Capital Markets re SEC hearing
June 25, 2014 SEC response to CII's May 22 letter on proxy distributors, universal proxy cards and director compensation
May 22, 2014 CII letter to the SEC on proxy distributors, universal proxy cards and director compensation
March 11, 2014 CII letter to SEC on Draft Strategic Plan
Jan. 8, 2014 CII rulemaking petition to SEC on universal proxy cards