Efforts by shareholders to directly influence corporate decision-making are intensifying, as demonstrated by the significant increase over the past three years in financially focused shareholder activism and the more recent efforts by large institutional investors to encourage directors to “engage” with shareholders more directly.
Through the collective efforts of large institutional investors, including public and private pension funds, shareholders at a significant number of companies are likely, within the next several years, to gain the power to nominate a portion of the board without undertaking the expense of a proxy solicitation. By obtaining proxy access (the ability to include shareholder nominees in the company’s own proxy materials), shareholders will have an additional lever to pull to influence board decisions.
Sidley Austin LLP Partners Holly Gregory, John Kelsh and Thomas Kim (pictured, top row, left to right), Counsel Rebecca Grapsas and Special Counsel Claire Holland (pictured, bottom row, left to right) recently revised their Sidley Updates, "Is Proxy Access Inevitable? Review of 2015 Proxy Access Results and Provisions—Related Considerations for Boards and Counsel" (previously published on July 4 and again Sept. 29) to reflect the most recent developments relating to proxy access, including new Securities and Exchange Commission guidance and draft proxy voting policy updates issued by Institutional Shareholder Services. Among other things, the authors have updated the chart of proxy access provisions in Appendix A (which are presented on a company-by-company basis as of Nov. 3) to add the terms adopted by 25 companies since our last update.
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