7 Law Firms Oppose SEC Director Nominations Rule; 80 Professors Support It

 

The SEC is considering changes to the federal proxy rules that would require, under certain circumstances, a company to include in the company’s proxy materials a shareholder’s, or group of shareholders’, nominees for director. In addition, the proposed rules would require companies to include in their proxy materials, under certain circumstances, shareholder proposals that would amend, or that request an amendment to, a company’s governing documents regarding nomination procedures or disclosures related to shareholder nominations, provided the proposal does not conflict with the SEC’s disclosure rules.

 

The law firms’ letter argues, in part, that the SEC’s proposal would “have the practical effect of foreclosing much of the potential scope and utility of private ordering in an area of great complexity and factual variation,” which, private ordering, the firms note, “has proven responsive to changing stockholder views concerning other governance matters.”

 

By contrast, the professors support the SEC’s proposals “to remove impediments to the exercise of shareholders’ rights to nominate and elect directors and to enable shareholders to place proposals regarding nomination and election procedures on the corporate ballot.” These professors urged the SEC “to adopt a final rule based on the SEC’s current proposals, and to do so without adopting modifications that could dilute the value of the rule to public investors.”

 

The SEC notice is available at http://www.sec.gov/rules/proposed/2009/33-9046.pdf. The firms’ letter is available at http://www.sec.gov/comments/s7-10-09/s71009-212.pdf. The law professors’ letter is available at http://www.sec.gov/comments/s7-10-09/s71009-282.pdf.

 

The law firms and their representatives on this matter are: Richard Hall, Cravath, Swaine & Moorel; Phillip R. Mills, Davis Polk & Wardwell; Charles M. Nathan, Latham & Watkins; John G. Finley, Simpson Thacher & Bartlett; Marc S. Gerber, Skadden, Arps, Slate, Meagher & Flom; James C. Morphy, Sullivan & Cromwell LLP; and Eric S. Robinson, Wachtell, Lipton, Rosen & Katz.

 

In addition to Harvard Law Professor Lucian A. Bebchuk, the professors are:

 

Michael Adler, Columbia University Business School; Robert Ashford, Syracuse University College of Law; Steven Balsam, Temple University; Lisa Bernstein, University of Chicago; Sanjai Bhagat, University of Colorado; Leonard Bierman, Texas A&M University; Bernard S. Black, University of Texas Law School; Michael Bradley, Duke University; J. Robert Brown, Jr., University of Denver Sturm College of Law; Lawrence D. Brown, Georgia State University School of Accountancy; Richard Buxbaum, University of California at Berkeley; David C. Cicero, Lerner College of Business and Economics University of Delaware; Jim Cox, Duke Law School; Martijn Cremers, Yale School of Management; Lawrence A. Cunningham, George Washington University; Lynne L. Dallas, University of San Diego School of Law; Steven M. Davidoff, University of Connecticut School of Law; George W. Dent, Case Western Reserve University School of Law; B. Espen Eckbo, Dartmouth College; Aaron Edlin, University of California at Berkeley; Franklin R. Edwards, Columbia Business School; Lisa M. Fairfax, The George Washington University Law School; Olubunmi Faleye, Northeastern University; James Fanto, Brooklyn Law School; Fabrizio Ferri, Harvard Business School; Jill E. Fisch, University of Pennsylvania Law School; Tamar Frankel, Boston University Law School; Jesse Fried, Harvard Law School; Nicholas L. Georgakopoulos, Indiana University School of Law – Indianapolis; Ronald J. Gilson, Stanford Law School; Henry Hansmann, Yale Law School; Jay C. Hartzell, The University of Texas at Austin; Claire Hill, University of Minnesota Law School; Michael C. Jensen, Harvard Business School; Kose John, New York University; Ehud Kamar, University of Southern California; Naveen Khanna, Michigan State University; Vikramaditya S. Khanna, University of Michigan Law School; Bruce Kogut, Columbia Business School; Jonathan GS Koppell, Yale School of Management; Dale Oesterle, Ohio State University; Richard W. Painter, University of Minnesota Law School; Robert A. Ragazzo, University of Houston Law Center; Jay R. Ritter, University of Florida; Len Rosenthal, Bentley University; Ronald D. Rotunda, Chapman University School of Law; Malcolm S. Salter, Harvard University; Antoinette Schoar, MIT Sloan School of Management; Kenneth Scott, Stanford Law School; Robert J. Shiller, Yale University; Stanley Siegel Professor of Law, New York University School of Law; D. Gordon Smith, Brigham Young University; Jeffrey Sonnenfeld, Yale School of Management; Marc I. Steinberg, SMU Dedman School of Law; Shyam Sunder, Yale School of Management; Eric Talley, University of California at Berkeley; Anjan Thakor, Washington University; Samuel C. Thompson, Jr., Pennsylvania State University; Belén Villalonga, Harvard Business School; William K.S. Wang, University of California, Hastings; Mark Weinstein, University of Southern California;  Michael S. Weisbach, Ohio State University; Charles K. Whitehead, Cornell University Law School; Luigi Zingales, University of Chicago; and Eric Zitzewitz, Dartmouth College.