Monday, October 5, 2009

SEC Commissioner Elisse Walter's Speech on Proxy Access - Oct 2, 2009

Excerpt from Commissioner Walter's speech
48th Annual Corporate Counsel's Institute
Northwestern University School of Law
Chicago, Illinois
October 2, 2009

...We received over 500 detailed and thoughtful comment letters that in the aggregate (and in some cases individually) address the over 100 questions we asked in our proposing release. And yes, we are, as always, carefully reading all of these responses — most of them, more than once. The comment letters raise a number of complex issues, including issues related to the workability of various aspects of our proposal. We are very thankful to the corporate community for taking the time to share its knowledge and experience with us.

Many comment letters also suggest strongly that we should allow shareholders to change their companies' access rules and, in particular, that shareholders should be permitted to approve provisions that may be more restrictive than those we've set in proposed Rule 14a-11-even provisions that deny shareholder access to the company's proxy statement. As my thinking about our proposed approach evolves, I am giving careful consideration to whether our rule needs any adjusting to address these concerns. I must say, however, that I have a less favorable reaction to those who suggest that directors should also have that unfettered choice.

As with all our rulemaking, we are committed to conscientiously and deliberately considering the comments and suggestions, which will — especially given the other items on our rulemaking agenda — take time. We are working diligently to make sure we understand all of the advantages and disadvantages of our proposed approach and the different parameters we set. And, at this stage in our review process, I have doubts that we will be in the position to make a truly informed judgment about these rules and be able to take final action in November (as some have speculated). Although I can't give you a definitive date, I expect we will likely move forward and consider an adopting release sometime in early 2010.

This means of course that final rules are not likely to be in place at the beginning of next year's "proxy season." To me, that timing is not ideal; however, given the complexity of this issue, I believe it is critical that we take the time we need to produce the best final product. Excellence should triumph over speed...

Click here to read the entire speech.