U.S. Chamber Calls Greater Proxy Access Good for Special Interests, Bad for Individual Investors

U.S. Chamber Calls Greater Proxy Access Good for Special Interests, Bad for Individual Investors

WASHINGTON, D.C.—The U.S. Chamber of Commerce today expressed significant concerns about one of the SEC's recent proposals to facilitate greater shareholder access to proxy materials. The Chamber believes that greater proxy access would not advance the financial interests of individual investors. Instead, it would allow labor unions and other special interest groups to advance their agendas at the expense of these investors.

"This is a complex set of proposals, and we will review them carefully," said David Hirschmann, president of the U.S. Chamber Center for Capital Markets Competitiveness. "However, the Chamber will continue to vigorously oppose any plan that allows groups to use the proxy process to promote narrow interests that do not serve the long-term goals of a company or investors. Politicizing the boardroom would hurt millions of individuals who rely on these investments for retirement."

The SEC is issuing two proposals as it crafts rules on investor access to proxy statements. The first would permit the exclusion from a company's proxy materials of all shareholder-proposed bylaws concerning director nominations. This would eliminate any ambiguity on the validity of shareholder access proposals in the wake of the 2nd Circuit decision in American Federation of State, County and Municipal Employees v. AIG Corporation. The second more troubling proposal would create an entirely new standard, giving shareholders owning 5% of a company's stock the ability to propose changes to a company's bylaws and allow shareholder director nominees to appear on the company proxy.

"With all the recent governance changes, boards of directors are already extremely responsive to shareholder interests," said Hirschmann. "Unions have long sought these expanded powers to leverage organizing concessions from boards that are not supported by a majority of workers or shareholders."

The U.S. Chamber is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.

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