1. Recent Skirmishes in the Battle Over Corporate Voting and Governance
Brett H. McDonnell
Conference on The Fall and Rise of Federal Corporation Law
Friday, October 13, 2006

2. Recent Developments SOX 2003 Delaware cases and after
SEC proposed shareholder nomination rule
AFSCME v. AIG

3. Conceptual Framework: Our Mixed Federal System
State system: high quality, managerialist bias
Purely national system: less quality, less bias
Mixed federal system: states set basic law, but subject to federal reaction

4. The Mixed System: Pros and Cons
Threat of federal intervention gets Delaware to reduce bias; still benefit from high Delaware quality
Sometimes state-only better: Congress incompetent, or too anti-manager
Sometimes national-only better: Congress also pro-manager, tolerates too much bias

5. The Case for Our Federal System: Muddling Ahead
SOX gets tougher on managers
Delaware responded (Omnicare, Oracle, Disney), also exchanges, SEC
All responses advance developing agenda of independent monitors and gatekeepers

6. The Case for Delaware: Is SOX a Costly Flop?
Stock price evidence mixed
Arguments over specific provisions
Politics of SOX: populist panic, or moment of public interest over special interests?
Consider SOX as part of system

7. The Case for Nationalization: Are We Too Easy on Managers?
Delaware slides back after 2003:
Omnicare Toys “R” Us
Oracle Beam
Disney Disney

8. Shareholder Nominations and Proxy Access
SEC’s failed proposed rule
A better approach: proxy access bylaws
Probably valid in Delaware
Excludable under Rule 14a-8?
AFSCME v. AIG: less informed and biased court opts for pro-shareholder rule; SEC may overturn, but allows shareholder activists to play defense