Stephen M. Rothstein (L) and Peter Flaherty
In a commentary published for Wednesday’s print edition for the Wall Street Journal, NLPC Chairman Peter Flaherty and Chief Program Officer for Ceres, Stephen M. Rothstein, wrote that recent decisions by the Securities and Exchange Commission harm the interests of shareholders, inhibiting their property rights stake in corporations and their abilities to address concerns about how companies conduct business and govern themselves. From the op-ed:
We head nonprofit organizations concerned with corporate governance and policy and are often on opposite sides of important issues. But we agree on this: When shareholders’ voices are silenced, our capital markets lose accountability. The system becomes more political, not less.
Paul Atkins (pictured top of page), chairman of the Securities and Exchange Commission, recently suggested that the shareholder proposal process be shut down. He would do this by deferring to state law to determine whether nonbinding shareholder proposals are a “proper subject” for inclusion in proxy materials—stepping back from the SEC’s longstanding role as referee between companies and proponents. Since it is impractical for activists to sue under state law every time a proposal is filed, Mr. Atkins would essentially hand the decision over to management.
He says he wants to reduce regulatory disclosures, but shareholder proposals aren’t disclosures imposed by regulators. They are communications initiated by shareholders, the company’s owners, directed at fellow shareholders….
Read the full commentary by Flaherty and Rothstein here.
