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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|