ICBA Urges SEC to Reconsider Shareholder Nominee Rules
ICBA has urged the SEC to reconsider its proposed rules requiring public companies under certain circumstances to include the names of shareholder nominees in their proxy materials.
In a comment letter to the SEC, ICBA questioned whether it is good corporate governance to require companies to include shareholder nominees in their proxy materials since this would only encourage contests between directors and dissident shareholder groups resulting in boards that are not accountable to shareholders as a whole. If the SEC proceeds with implementing the proposed rules, ICBA recommended deferring action on the proposals until companies have had a chance to digest and comply with the new stock exchange listing standards and the Sarbanes-Oxley rules.
ICBA also expressed concern that the proposed rules would make it more difficult for public companies and, in particular, community banks and bank holding companies, to find qualified directors since directors nominated by the company will become less interested in serving if their boards become more adversarial and elections become more contested. ICBA suggested exempting companies that are not "accelerated filers" (e.g., companies whose aggregate market value is less than $75 million), since the smaller companies would generally have a more difficult time coping with the legal complexity of the proposed regulations and the expenses associated with an election contest.