Associated Press DEFENDER: SEC Chairman Mary Schapiro says the new proxy-access rules are needed to ensure accountability among corporations.
Business groups denounce move as burdensome, favoring special interests
Patrice Hill
The Washington Times
8/25/2010
The Securities and Exchange Commission on Wednesday handed labor and social-activist groups a big victory by approving rules making it easier for them to put allies on corporate boards throughout the country.
The measure was approved on a 3-2 vote by a divided commission, with Republican members warning that the change may not pass muster in the courts. It is the first major regulation from last months landmark financial-reform law to win approval.
Business groups insisted that the measure will damage corporate decision-making by bringing fights over politics and radical social agendas into the boardroom. But shareholder groups said it merely gives them minimal rights that investors in other developed countries already have.
AFL-CIO President Richard Trumka called the approval a “historic step in empowering long-term investors” and added that the labor federation has sought the change for “close to 70 years.” Labor groups funneled millions of dollars into a campaign to enact the financial-reform measure, in part to secure the new rules.
“Universal proxy access is a fundamental shareholder right enjoyed in most developed nations around the world, so we are very happy to see the United States achieve parity on this,” said Lisa Woll, chief executive of the Social Investment Forum, which pushes for “socially responsible” and “environmentally sustainable” investments by businesses.
But Larry Burton, executive director of Business Roundtable, said that for the 12,000 publicly traded corporations affected by the SEC’s ruling, it adds regulatory burdens, controversies and uncertainties that businesses and the economy can ill afford as they struggle to recover from the recession.
“It not only expands the role of the federal government, it increases business uncertainty and costs,” he said, adding that the ruling “will allow special-interest groups to pursue narrow agendas and exacerbate the markets short-term focus.”
Read the rest at The Washington Times.
