Dear SEC, We Support the Shareholders. Sincerely, Law Firms
Getting a letter addressed from a law firm can be cause to cause consternation, but one signed off by nine different law firms can lead to a medical condition. Fortunately the letter sent to Securities and Exchange Commission (SEC) signed by multiple law firms was in support of its proposal to beef up shareholder rights.
Nine major securities and corporate governance law firms signed their support of the SEC initiative in a letter, in light of comments made by certain New York law firms challenging the SEC's proposed rule. The SEC rule, called "Facilitating Shareholder Director Nominations" would require a company to include its shareholders' nominees for director in proxy materials.
It all comes down to accountability.
In the game of corporate governance, accountability and transparency are buzz words. The SEC Rule would entail increased accountability for a company in selection a fitting board of directors by creating a transparent election process in which shareholders get a say.
Specifically the letter states:
the Submitting Law Firms believe that the Proposal - including both the proposed amendment to Rule 14a-8(i)(8), and the adoption of the new proposed Rule 14a-11 - would establish reasonable and appropriate disclosure requirements for corporations, would encourage director accountability, and would facilitate the ability of shareholders to exercise their rights under state law as the owners of corporations. We disagree that any aspect of the Proposal would impede the shareholder franchise or improperly conflict with state law.
To read the it in its entirety, you can download the letter to the SEC from Grant & Eisenhofer P.A. website.
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