Emory Corporate Governance and Accountability Review


Zhiyuan Liu


Zhiyuan Liu examines how proxy access rules can be reformed to promote shareholders' involvement in publicly traded companies' corporate governance. Current legal regime, mainly Section 14 of the Securities Exchange Act, confers the incumbent board members wide discretionary authority to exclude from proxy materials shareholders' proposals regarding board nomination. Shareholders have to wage costly proxy contest to achieve their goals. Although SEC attempted to propose a new rule that required companies to include shareholders' nominees of the board directly in the proxy materials, D.C. Circuit Court struck down such attempt on the ground that it was arbitrary and capricious. Without risking being nullified, the essay suggests that the new proposal should consider the impact of modern market forces and propose a rule that lessens the burden of proxy access and empower shareholders to exercise their own choices.