House Financial Services Committee Votes on Proxy Access this Wednesday
Proxy Access legislation is moving in the US House of Representatives this week. Concerned ShareOwners should be prepared to contact members of the House Financial Services Committee as soon as possible to support the Waters-Peters amendment , which will go to a roll call vote on Wednesday. The amendment seeks to affirm the SEC's current authority to propose proxy access rules mandating that public companies disclose in their proxy materials the names of all candidates running in director elections. The Chamber of Congress is preparing to sue the SEC to prevent shareowners from learning the names of all nominees in free and fair elections. This amendment to the financial reform legislative package now moving its way through Congress is required to avoid unnecessary litigation and any further delay in establishing the right of owners to keep directors accountable. Congress Daily decribes the current state of play on Capital Hill.
Thursday, Oct. 29, 2009
by Bill Swindell with Andy Leonatti contributing
House Democrats attempted Wednesday to give the SEC more defined power over corporate proxy rules, setting up another battle with business lobbyists over the revamp of the nation's financial regulatory system.
The latest skirmish occurred over an amendment by Rep. Maxine Waters, D-Calif., that would codify the SEC's authority to issue rules over shareholder proxy access. Waters offered the amendment to legislation that would beef up protection for securities investors. It comes in the aftermath of the SEC's failure to head off frauds such as Bernard Madoff's Ponzi scheme.
The SEC this year proposed a rule that would require companies in some circumstances to include in their proxy materials the nominations for directors by shareholders. But some critics question whether the agency has the right to issue rules over corporate governance standards that are enacted at the state level.
Waters said the language would clear up any confusion. "This part of governance just has to do with making sure the SEC has the authority to move with making rules for proxy," said Waters, who had the backing of institutional investors.
But it was opposed by Rep. Michael Castle, R-Del., whose state is the nation's leader for corporate headquarters, with more than 50 percent of all publicly traded U.S. companies.
"What I don't think [that] we in this committee or in this Congress should be doing is stepping up and starting to tell corporations exactly how they should elect directors or conduct other business. It's the federalization of corporate law, which I think is exactly wrong," Castle said. "These powers should be left to the states."
The fight over corporate governance was not supposed to be part of the regulatory reform debate. Financial Services Chairman Barney Frank said he would take a comprehensive look next year at an effort spearheaded by Reps. Gary Peters, D-Mich., and John Campbell, R-Calif.
The Obama administration has not made it part of its agenda, but Sen. Charles Schumer, D-N.Y., has sponsored legislation that would, among other things, split duties between the board chairman and CEO, require annual director elections and eliminate staggered board terms -- and he might look to attach pieces of the bill when regulatory reform moves in the Senate.
The U.S. Chamber of Commerce has ramped up its opposition to the Schumer bill and has been on guard against any move to place it in the regulatory package.
Campbell and Peters were on opposite sides Wednesday, with the Democrat pushing ahead for the Waters amendment and the Republican asking that it would be taken up as part of the debate next year.
Castle further argued that states are acting on their own in response to the SEC action, lessening the need for federal action. Delaware's Legislature passed a bill in April that would allow a company to amend its bylaws to give shareholders such a similar right as proposed by the SEC.
"My sense of all the things you are talking about are happening anyhow, all across the country," Castle said.
Frank sided with Waters, noting that she was not dictating what the SEC should implement. "This is not us intervening on this with specifics. It is saying to the SEC in this bit, 'go ahead, because we think it's better for you to have your authority asserted,'" Frank said.
The committee is scheduled to complete its markup on the bill Wednesday, when it will vote on the Waters amendment as well as others, before approving the bill.
Copyright ©2009 by National Journal Group Inc. The Watergate 600 New Hampshire Ave., NW Washington, DC 20037
202-739-8400 • fax 202-833-8069 NationalJournal.com is an Atlantic Media publication.
Thursday, Oct. 29, 2009
by Bill Swindell with Andy Leonatti contributing
House Democrats attempted Wednesday to give the SEC more defined power over corporate proxy rules, setting up another battle with business lobbyists over the revamp of the nation's financial regulatory system.
The latest skirmish occurred over an amendment by Rep. Maxine Waters, D-Calif., that would codify the SEC's authority to issue rules over shareholder proxy access. Waters offered the amendment to legislation that would beef up protection for securities investors. It comes in the aftermath of the SEC's failure to head off frauds such as Bernard Madoff's Ponzi scheme.
The SEC this year proposed a rule that would require companies in some circumstances to include in their proxy materials the nominations for directors by shareholders. But some critics question whether the agency has the right to issue rules over corporate governance standards that are enacted at the state level.
Waters said the language would clear up any confusion. "This part of governance just has to do with making sure the SEC has the authority to move with making rules for proxy," said Waters, who had the backing of institutional investors.
But it was opposed by Rep. Michael Castle, R-Del., whose state is the nation's leader for corporate headquarters, with more than 50 percent of all publicly traded U.S. companies.
"What I don't think [that] we in this committee or in this Congress should be doing is stepping up and starting to tell corporations exactly how they should elect directors or conduct other business. It's the federalization of corporate law, which I think is exactly wrong," Castle said. "These powers should be left to the states."
The fight over corporate governance was not supposed to be part of the regulatory reform debate. Financial Services Chairman Barney Frank said he would take a comprehensive look next year at an effort spearheaded by Reps. Gary Peters, D-Mich., and John Campbell, R-Calif.
The Obama administration has not made it part of its agenda, but Sen. Charles Schumer, D-N.Y., has sponsored legislation that would, among other things, split duties between the board chairman and CEO, require annual director elections and eliminate staggered board terms -- and he might look to attach pieces of the bill when regulatory reform moves in the Senate.
The U.S. Chamber of Commerce has ramped up its opposition to the Schumer bill and has been on guard against any move to place it in the regulatory package.
Campbell and Peters were on opposite sides Wednesday, with the Democrat pushing ahead for the Waters amendment and the Republican asking that it would be taken up as part of the debate next year.
Castle further argued that states are acting on their own in response to the SEC action, lessening the need for federal action. Delaware's Legislature passed a bill in April that would allow a company to amend its bylaws to give shareholders such a similar right as proposed by the SEC.
"My sense of all the things you are talking about are happening anyhow, all across the country," Castle said.
Frank sided with Waters, noting that she was not dictating what the SEC should implement. "This is not us intervening on this with specifics. It is saying to the SEC in this bit, 'go ahead, because we think it's better for you to have your authority asserted,'" Frank said.
The committee is scheduled to complete its markup on the bill Wednesday, when it will vote on the Waters amendment as well as others, before approving the bill.
Copyright ©2009 by National Journal Group Inc. The Watergate 600 New Hampshire Ave., NW Washington, DC 20037
202-739-8400 • fax 202-833-8069 NationalJournal.com is an Atlantic Media publication.
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