U.S. Chamber Urges SEC to Reject Union Attempts to Rig the Proxy Process

WASHINGTON, DC-The United States Chamber of Commerce urged the Securities and Exchange Commission (SEC) to reject union-led proposals to use the annual proxy process to advance special interest agendas.

"The Chamber will fight all efforts by unions and other special interests to rig the proxy process to advance their agendas at the expense of individual investors," said David Hirschmann, president of the U.S. Chamber Center for Capital Markets Competitiveness. "This would be a giant step in the wrong direction by making our capital markets less attractive globally."

The SEC is hosting a roundtable to discuss a rule it proposed in December 2003 that would require companies to include on the proxy ballot director candidates nominated by shareholders who own a small percentage of the company. Unions, including AFCSME and the AFL-CIO, have sought to add this proposal to the proxy ballots at individual companies and have lobbied the SEC to adopt this requirement for all companies. The Chamber believes that the SEC does not have the authority to regulate corporate elections, which are subject to state law requirements.

Electing directors beholden to unions or other special-interests would weaken the functioning of strong independent boards to the detriment of all shareholders, according to the Chamber. Directors are independent if they are only obligated to advance the interests of all shareholders. The Chamber urges the SEC to take a comprehensive and balanced look at the issue.

"Special-interest politics have no place in the boardroom," said Hirschmann. "It appears that this is a backdoor attempt to achieve what unions have been unable to do at the bargaining table."

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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