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Universal Proxy Cards
CII believes shareowners should vote their shares with a proxy card showing all director nominees.
"Universal" proxy cards would let shareowners vote for the nominees they wish to represent them on corporate boards. This is vitally important in proxy contests, when board seats (and in some cases, board control) are at stake.
Universal proxy cards would 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. A more in-depth response to the SEC's propsal is available below under "Correspondence."
As shown in the graph above, contested elections are exceedingly rare in the United States. Based on recent contests going to a vote in the Russell 3000 index, the SEC's proposed rule would have no impact on 99.4 percent of director elections.
Currently, shareowners receive two versions of the proxy card when an election has more nominees than available board seats: one from the company and one from the dissident shareholder. Shareowners are prohibited from using both cards to vote, and neither card has a complete list of board nominees. Thus, a shareowner is disenfranchised if he or she supports a combination of nominees that is not found on either card.
This SEC’s “bona fide nominee” rule, adopted in 1966, allows for some mix-and-match capability, but 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 provide shareowners full “mix and match” capability. The rule proposed by the SEC in 2016 would correct this deficiency.
|Resources & Advocacy|
|CII corporate governance policy on universal proxy cards|
|Dec. 28 2016||CII comment letter to SEC on its proposal to implement 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|