SEC Dropping ‘Proxy Access’ Appeal

The Securities and Exchange Commission announced late Tuesday that it would not seek an appeal of a decision by the U.S. Court of Appeals in Washington, D.C., over its so-called “proxy access” rule. The rule would have made it easier for shareholders to vote out corporate directors.

Some of the debate over the proposed rules centered on whether the SEC had the authority to adopt such rules, Schapiro said. But the Dodd-Frank Wall Street Reform and Consumer Protection Act, she said, “specifically states that the SEC has authority to adopt rules that require companies to include shareholder board nominees in company proxy materials.”

The SEC’s decision is seen as a victory for business groups, including the Chamber of Commerce and the Business Roundtable, both of which sued to block the rule.

“I firmly believe that providing a meaningful opportunity for shareholders to exercise their right to nominate directors at their companies is in the best interest of investors and our markets,” SEC Chairman Mary Schapiro said in a statement. “It is a process that helps make boards more accountable for the risks undertaken by the companies they manage. I remain committed to finding a way to make it easier for shareholders to nominate candidates to corporate boards.”