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Ian Roffman, chair of the Litigation Department and a partner in the firm’s Securities Enforcement and Litigation practice group, was quoted by the Boston Business Journal (BBJ) in “Why State Street is giving shareholders a bigger say over its board” on October 21. The article discusses State Street’s recent adoption of proxy access--shareholders’ ability to nominate directors--through a vote by its board of directors instead of a shareholder proposal, which is more typical. Proponents argue that the process makes boards more responsive to shareholders, however, this move is not without risk. Investors could nominate candidates who oppose management and the board’s handling of the company, even though State Street put restrictions on the types of shareholders that can nominate directors.

The restrictions placed on proxy access by State Street will limit activist investors’ ability to nominate antagonistic directors—to nominate a candidate, the shareholder must own shares of at least three percent of the total voting power for at least three years. In addition, nominees must make up no more than 20 percent of the board.

Ian said “It appears to be a proactive step toward more proxy access to shareholders, while at the same time balancing against some of the risks that come along with it.”

To view the article, click here.