As we noted during the summer, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in July of this year. The Dodd-Frank Act directed the Securities and Exchange Commission to adopt rules that would allow greater shareholder access by requiring a company to include in its proxy materials shareholder nominees to the board of directors.
One goal of the Dodd-Frank Act was to give the SEC broad discretion in issuing proxy rules that ensure investor protection and facilitate shareholder access. The SEC invoked this broad discretion on Aug. 25, 2010, by amending its rules, which were scheduled to become effective Nov. 15, 2010, to require all public companies to include in their proxy materials board candidates who have been nominated by shareholders meeting certain conditions. On Oct. 4, 2010, the proxy access rules were put on hold by the SEC as a result of litigation filed by the Business Roundtable and the U.S. Chamber of Commerce, which alleges the amended rules are arbitrary and capricious, among other things.
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