I haven’t heard a lot about universal ballots since June of 2015 when SEC Chairman Mary Jo White addressed corporate secretaries at The Society of Corporate Secretaries & Governance Professionals Annual Conference.
White said that she favored the universal ballot concept, and she had already asked her staff to bring her appropriate rule-making recommendations. In the article I wrote for C-Suite Magazine titled “Vote of Confidence,” I considered the pros and cons of what the universal ballot will mean to today’s boards and their ability to strategically plan their board composition and development.
I’ve been asked by several board members:
“Why do I have to worry about this now when it’s not formally been proposed?”
The truth is, you don’t need to do anything but be aware and understand what it would mean to publicly held boards if the SEC decided to push the issue. Imagine losing your audit chair, their replacement, and your lead director in one fell swoop at the annual meeting and not really knowing that you have the talent or the skill sets with the new directors to fill that void. I’m all in favor of giving shareholders more say in who represents them… but not at the expense of the benefits effective boards can provide both management and investors with respect to growing long-term shareholder value.
This article is a shot across the bow of what might be coming down the pipe; and if it does, you have to be ready to join hands and most likely support the U.S. Chamber of Commerce in their protest of the SEC action. That will require you to comment on your feelings during the comment period. If you aren’t heard loud and clear, then you’ll have to live with the consequences. Enjoy the read!