Shearman & Sterling By-law Developments | 43
BY-LAW DEVELOPMENTS
Recent years have seen the development and implementation by U.S.-listed
companies of new by-law provisions. Some, such as advance notice by-laws,
have been, at least in part, a reaction to increased levels of shareholder activism.
U.S.-listed companies are also considering forum selection by-laws, intended to
facilitate the management of shareholder litigation, and proxy access by-laws,
intended to facilitate the nomination of director candidates by large shareholders.
CERTAIN BY-LAW TRENDS
PROXY ACCESS BY-LAWS
A proxy access by-law permits shareholders satisfying
certain ownership criteria to include board nominees in the
company's proxy statement. As described in the article on
page 18, proxy access is a rapidly evolving area of focus
among shareholders. Our survey data shows a continued
increase in proxy access by-laws at the Top 100 Companies,
and many other U.S. public companies have adopted proxy
access by-laws in the past year.
FORUM SELECTION BY-LAWS
A forum selection by-law generally requires that
certain litigation commenced by shareholders against
the company be adjudicated in courts located in the
company's state of incorporation. More companies
have adopted this type of by-law since the Delaware
Chancery Court upheld its validity in 2013.
7 Top 100 Companies had proxy access by-law
provisions in 2015, and this number increased
dramatically to 69 companies in 2016. We saw
another significant increase to 84 companies in
2017 as proxy access continues to gain traction.
Top 100 Companies
have adopted this
by-law provision.
Top 100 Companies
have not adopted this
by-law provision.
27 73
84
69
7
2015 2016 2017
