SEC Explores Opening Door to Shareholder Arbitration
Yesterday's WSJ included an article that states that the SEC is exploring a new policy that could permit companies to resolve complaints by aggrieved shareholders through arbitration, limiting shareholders' ability to sue in court. FEI's "Financial Reporting" Blog goes into more detail about this interesting proposition.
North Dakota Races to the Top for Shareholders
From Jim McRitchie's CorpGov.net: North Dakota Governor John Hoevenhe signed into law the most shareholder friendly incorporation provisions in the United States. Among the most significant provisions of the new law are the following:
- Majority voting in election of directors - In an uncontested election of directors, shareholders have the right to vote "yes" or "no" on each candidate, and only those candidates receiving a majority of "yes" votes are elected.
- One year terms for directors
- Advisory shareholder votes on compensation reports - The compensation committee of the board of directors must report to the shareholders at each annual meeting of shareholders and the shareholders have an advisory vote on whether they accept the report of the committee.
- Proxy access - The corporation must include in its proxy statement nominees proposed by 5% shareholders who have held their shares for at least two years.
- Reimbursement for successful proxy contests - The corporation must reimburse shareholders who conduct a proxy contest to the extent the shareholders are successful. Thus, if a shareholder conducts a proxy contest to place three directors on a corporation's board and two of the candidates are elected, the shareholder will be entitled to reimbursement of two-thirds of the cost of the proxy contest.
- Separation of roles of Chair and CEO - The board of directors must have a chair who is not an executive officer of the corporation.
- A "special meeting" shall be held if demanded by shareholders owning 10% or more of the voting power.
Chapter 10-35 of the North Dakota Century Code gives companies a choice, after July 1, 2007, to be subject to the new law by including a provision to that effect in their articles of incorporation. North Dakota only has two publicly traded companies chartered in the state, Dakota Growers Pasta, and Integrity Mutual Funds of Minot. ("Most support corporate governance option," in-forum.com, 3/5/07).
The 2007 Romeo & Dye Section 16 Deskbook
A few weeks ago, the 2007 Romeo & Dye Section 16 Deskbook was mailed. This critical resource is essential for anyone working with Section 16 - try a no-risk trial to the Romeo & Dye Section 16 Annual Service to receive a copy of the Deskbook immediately.