Shareholders may be able to gain access to companies’ proxy statements through shareholder proposals, even though the Securities and Exchange Commission’s (the SEC’s) proposed Rule 14a-11 was overturned by the courts. Therefore, companies should consider whether they need to take steps to prepare for shareholders seeking to propose their own directors. This Legal Alert discusses the rules governing a shareholder proposal that seeks to institute proxy access procedures (a proxy access proposal) and how companies should prepare for the upcoming proxy season.

On September 20, 2011, amendments to Rule 14a-8 of the Securities Exchange Act of 1934 (the Rule 14a-8 Amendments) became effective. These amendments modify Rule 14a-8 to permit proxy access proposals that seek to add procedures to companies’ organizational documents that would allow shareholders to more easily nominate directors in future proxy statements. As such, proxy access may now be achieved through “private ordering,” on a company-by-company basis, rather than the universal proxy access proposed by recently vacated Rule 14a-11.