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Is The SEC’s Universal Proxy Proposal A Product Of Agency Capture?

More than six decades ago, the late Professor Marver H. Bernstein published his theory of regulatory capture in Regulating Business By Independent Commission (Greenwood Press 1955).  According to his theory, agencies follow a life cycle of birth, maturity and old age.  As an agency enters senescence, it inevitably becomes captive to the groups that it regulates.…

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Some Questions Boards Might Want To Ask When Considering Fee-Shifting Bylaws

1.  Is a fee-shifting bylaw facially valid under applicable law?  The Delaware Supreme Court has held that a fee-shifting bylaw adopted by a Delaware non-stock corporation is facially valid.  ATP Tour, Inc. v. Deutscher Tennis Bund, 2014 Del. LEXIS 209 (Del. May 8, 2014).  This decision does not bind courts in other states and they…

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On Closer Inspection, This CII “Best Practice” May Be Neither Good Nor Legal

The Council of Institutional Investors has adopted what it describes as “a comprehensive body of corporate governance best practices”, including Policies on Corporate Governance.  I question, however, whether some of these policies really are “best practices” or even in conformity with applicable law. For example, the Section 3.7 of the CII’s Policies on Corporate Governance unequivocally, and without…

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Just Who Is Behind The Universal Proxy?

Recently, it was reported that the Council of Institutional Investors had submitted a petition for rule making to the Securities and Exchange Commission.  Indeed, the CII did submit this petition on January 8, 2014.  In the petition, the CII describes itself as “a nonprofit, nonpartisan association of public, corporate and union pension funds and other employee benefit…

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What’s The Plural of Prius?

What Cicero Would Have Said The Toyota Prius is a very popular car.  So popular, some people might actually own two or more.  But how do you describe more than one Prius? The -us ending suggests that Prius may be Latin in origin.  Indeed, there is a Latin word “prius”, but it isn’t a proper…

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Corporate Director Registry Bill Introduced

California Corporations Code § 318 has been on the books since 1993, Cal Stats. 1993, c. 508.  That section required the Secretary of State to develop and maintain a registry of “distinguished women and minorities” who are available to serve on corporate boards of directors.   In 1999, the Secretary of State transferred this responsibility to California…

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