Law firms call on SEC to ensure shareholder rights

The proposal, entitled Facilitating Shareholder Director Nominations, outlines a new rule requiring a company to include its shareholders' nominees for director in its proxy materials.

The letter from the group of Manhattan law firms urges the SEC to strengthen the rights of shareholders by providing the opportunity to place director candidates on the company's proxy ballot card, and to establish disclosure requirements for corporate nominees.

The firms highlight that this would encourage director accountability and allow for shareholders to exercise their rights under state law as owners of corporations.

Labaton Sucharow senior partner Edward Labaton said: "These critics of proxy access are less concerned with promoting sound corporate governance than they are with insulating incumbent directors from true accountability."

He added: "It is the lack of accountability under the current rules that has promoted the very abuses in risk management and excessive executive compensation that we are paying for today."

In August, the California Public Employees' Retirement System (CalPERS) sent their own letter of support for the SEC's proposal.

CalPERS chief investment officer Joe Dear said: "The proposed rule is a historically significant reform that will enable investors to hold corporate boards accountable and restore investor confidence in the capital markets."

The California State Teachers' Retirement System (CalSTRS) also supports the SEC's proposed regulations and said that the proposed rule is a long-overdue way to provide shareholders a meaningful voice in the corporate director nomination process.

The law firms which signed and submitted the letter include Barroway Topaz, Kessler, Meltzer and Check, Berman De Valerio, Bernstein Litowitz Berger and Grossman LLP, Cohen Milstein, Grant and Eisenhofer P.A, Kaplan Fox, Labaton Sucharow LLP, Milberg LLP and Pomerantz Haudek Grossman and Gross LLP.