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U.S. markets watchdog revives effort to overhaul board fight votes

Stock MarketsApr 16, 2021 04:50PM ET
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© Reuters. FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door

By Pete Schroeder

WASHINGTON (Reuters) - The U.S. markets regulator announced on Friday it was soliciting fresh feedback on a stalled rule writing project that would have given shareholders more freedom to vote for their preferred candidates during contested corporate board elections.

The move indicates the Securities and Exchange Commission is preparing to restart work on the proposed rule, which the regulator shelved under President Donald Trump after it had been initially unveiled under President Barack Obama.

"This is an important step toward finalizing rules that will facilitate clarity and efficiency for shareholders voting in director elections," said SEC Acting Chair Allison Herren Lee in a statement.

The 2016 proposal would have changed how shareholders vote during activist investor-led fights for board seats, an issue that has divided companies and investors for years. The decision to restart the rulewriting process seems to be a win for activist investors who say the current system favors company management in board fights. Companies have cautioned changing the rules could spark more disruptive activist-led fights.

Right now, shareholders voting remotely have to choose from a full slate of board directors nominated by the management or a competing set of nominees provided by an activist investor. Investors cannot pick and choose specific preferred candidates unless they send a representative to vote in person at the annual meeting, and most votes are cast remotely.

The proposed SEC rule would establish a "universal proxy" standard that would allow voters to mix-and-match candidates remotely. The SEC is accepting new comments on that proposal for 30 days.

U.S. markets watchdog revives effort to overhaul board fight votes
 

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Comments (1)
Chris Sundo
Chris Sundo Apr 16, 2021 5:15PM ET
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Trump was too much protecting the rich from the poor by rolling back what Obama built up for the underdog of shareholder rights. Now Trump's torn-down systems need to be re-rolled back up. -- Trump's election was necessary to see how he exits and how his performance was really lagging in most areas other than China. -- Trump's election was necessary to force a change away from lame politicians of the kind of the Clintons, but now that he has shown WHAT CAN BE DONE WITH CHINA, the new administrations can imitate Trump's audacity and keep the ball of pressure rolling against China, which is a detrimental country for the progress of the world's structural integrity needed to support nations to grow on their own in a fertile soil of democracy. -- The world must stand up against repression by China, Russia and the other autocrats against their closest neighbors. -- Any country we, the still free world would loose would shift the balance of power.
Ramogi Ochola
Ramogi Ochola Apr 16, 2021 5:15PM ET
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why you mixing issues. I thought the article talked about board voting and not foreign affairs
 
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