February 25, 2005

Movement for Majority Votes in Director Elections

At its conference in October, members of the International Corporate Governance Network discussed the advantages of changing state laws to move from pluarality to majority voting, rather than have the SEC adopt its shareholder access framework.

Now, the ABA has formed the “Majority/Plurality Voting Task Force” – headed up by former Delaware Supreme Court Chief Justice Norman Veasey – to examine the possibility of updating the ABA’s Model Act in this area. The Model Act serves as a framework for corporate law in more than 30 states.

Investors clearly are interested in this topic. So far this year, IRRC reports that over 80 companies have received shareholder proposals that seek to have a majority vote standard implemented – and Corp Fin has been allowing the inclusion of these proposals. Last week, Corp Fin rejected Citigroup’s no-action exclusion request over this type of proposal.

More on the Art of Minute-Taking

Boy, look at the focus on minutes in this article in the Boston Globe. The article is about how – in the takeover of Gillette by Procter & Gamble – the Massachusetts Secretary of State (and future gubernatorial candidate) is “investigating” the takeover, to see if the Gillette CEO’s severance package may have motivated him to sell the company.

The article notes that the Secretary of State “said the minutes of the directors meeting the company provided him are too skimpy to reflect what he said is the magnitude of the deal combining the two consumer product giants. ‘There’s no evidence of extensive deliberations,” Galvin said. “I find it hard to accept that these are the actual minutes of what occurred.'”

Next week, the panel will discuss how to take minutes in the current environment on – “Steps to Take: How to Avoid Director Liability After WorldCom, Enron and Disney” – featuring John Olson of Gibson Dunn; Marty Lipton of Wachtell Lipton; Frank Balotti of Richards Layton; and Rich Koppes of Jones Day.