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Law Firms Examine the Proxy Access Decision

As we mentioned in our July 25, 2011 postthe Federal Court for the DC Circuit struck down the SEC's 2010 proxy access rule, holding that the SEC acted "arbitrarily and capriciously" for failing adequately to assess the economic effects of the rule. The SEC had adopted the rule to facilitate the ability of shareholders to nominate and elect board members.  The Court's opinion treats the SEC quite harshly, stating that the SEC both failed to support its conclusion that increased proxy access would improve board performance and increase shareholder value, and that the SEC had failed to take into account the likely costs of the proposal.

This decision may have some obvious, and not so obvious fallout.  To assist boards in understanding this decision and some of its potential effects, we have assembled below (in no particular order) some of the myriad law firm memos dissecting and discussing the case and opinion. 

 

Dechert - http://www.dechert.com/files/Publication/a939504c-7ec6-4609-86e2-4db93d13f0d9/Presentation/PublicationAttachment/34e9144f-294b-4568-87c6-5f3989b32453/C%26S_SA_07-11_US_Court_of_Appeals.pdf

Davis Polk - http://www.davispolk.com/files/Publication/cc18a6b4-7e2b-4028-a18a-78bf3d8afe1e/Presentation/PublicationAttachment/e6cc33d2-d9f7-400f-b4de-7ae3ba61a816/072211_SEC_Proxy_Access_Rule.html

Gibson Dunn - http://www.gibsondunn.com/Publications/Pages/DCCircuitVacatesSECProxyAccessRule.aspx

Jones Day - http://www.jonesday.com/dc_circuit_court_of_appeals_vacates/

Sullivan & Cromwell - http://seclawcenter.pli.edu/2011/07/26/experts-speak-on-the-proxy-access-decision/sc-court-vacates-sec-proxy-access-rule/

Wilson Sonsini - http://www.wsgr.com/publications/PDFSearch/wsgralert-proxy-access-rules.pdf