SEC to look outside ballot on proxy access

By Karey Wutkowski

WASHINGTON (Reuters) - Electronic shareholder forums, e-proxies and other technological approaches may be among the inventive ways that the U.S. Securities and Exchange Commission tries to refocus the debate in 2008 over how to give shareholders more power to nominate directors.

Investor advocates have long considered access to the company's ballot the "holy grail" of shareholder rights but the SEC's three Republican commissioners recently rejected a plan that would have led to the opening up of that ballot.

SEC Chairman Christopher Cox said even though he voted to deny access, he was not happy where it left shareholders and would take another look at the issue in 2008.

Most academic and industry experts say the tough political nature of the issue and a lack of compromise among SEC commissioners will prevent the passage of a rule this year that opens up the company ballot.

"I don't think this issue is going to see much progress until we have a presidential election," said John Coffee, a professor at Columbia Law School.

Cox's options to try to vindicate himself as a supporter of shareholder rights include some Internet-oriented approaches, according to experts who cite Cox's interest in technology.

"He's been a big advocate of technology as a tool for investors to use," said Claudia Allen, an attorney who chairs the corporate governance practice group at law firm Neal Gerber & Eisenberg. "Some of the recent changes in rules do facilitate shareholders making their opinions and views known as well as heard."

For example, the SEC could encourage companies to make broader use of so-called e-proxies. The agency approved a rule one year ago allowing annual corporate proxy materials to be posted online, reducing high printing and mailing costs.