Proxy Access: It Really Bugs Some People

So is the SEC's new proxy access proposal getting people fired up?

Uh..is the Pope Catholic, and on Facebook?

This is PROXY ACCESS, folks: the idea that inspired boatloads of comments to the SEC when they proposed it in 2003, and may have cost Chairman Donaldson his job. It's the same concept Christopher Cox killed in late 2007 because, he said, the mere possibility that such a thing could happen was too scary to be left dangling over proxy season.

As bloggers at The Corporate Counsel note in this informative post, this is the third time in this young millenium that the SEC has floated a proposal to allow proxy access. And if you think people got hot and bothered over the American Idol results, just wait.

Yes, for some people, the thought of shareholders adding their own director candidates to the proxy statement is more horrifying than the sight of Adam Lambert's tongue on national TV. (I absolutely swear this is my last American Idol reference until next year.)

Take the folks over at Business Roundtable, who are calling proxy access "an unprecedented preemption of state corporate law—the bedrock of corporate governance—that will turn the boards of more 15,000 publicly-traded companies into political bodies and threaten their ability to function." In other words, yeah, the world will come to an end. Given that the members of Business Roundtable are CEOs of large public companies, they may be right that proxy access will bring about The End of the World As They Know It, which is the very thing that makes it a good idea.

They're also right that, if the SEC institutes proxy access, it will probably mess around with state corporate law. And they're absolutely right that state corporate law has been "the bedrock of corporate governance"; it is state legislatures and courts (hello, Delaware) that have protected the current system of corporate governance, which is premised on the happy fiction that boards of directors oversee the management of companies.

Yes, corporate governance has been an oxymoron, which is why I hope the SEC won't chicken out this time. Proxy access isn't the only thing that could end the world, anyway. So it's time for the SEC to make like Bugs Bunny: light the fuse, grin, and see what happens next. I doubt anyone will get seriously hurt.

Image credit: mahalo.com