Proxy access is not about giving shareholder’s rights, it is about checking C-suite power so that everyone wins instead of just the CEOs. Proxy access has the potential to address some of the pressing issues with corporate power. Corporate power and influence are concentrated in the board of directors, proxy access gives shareholders the opportunity to infiltrate this exclusive “inner circle” of power. Shareholder access to the board can push change towards greater diversity in the boardroom and demand greater transparency and compliance.
Consistent with modern financial regulation, United States regulators are increasingly focusing upon individual accountability of corporate officers and directors. Once a regulatory agency contacts a corporation regarding an inquiry into the actions of its agents, it is the duty of the corporation to front the costs of legal defense and representation. Historically, corporate directors and officers liability insurance (“D&O”) covered the costs of legal defense and costs associated with the regulatory investigation. In light of the increasing government emphasis on individual liability within corporations, traditional D&O liability insurance is no longer guaranteed to protect corporate exposure to regulatory inquiry. As a result of these changes to corporate exposure, insurance agencies have begun to create novel insurance solutions to solve the problems created by the new regulatory policy.