Time to Start Asking Questions About the Proxy Process

Public companies in the United States face unique demands. Under rules developed by the federal Securities and Exchange Commission (SEC), any of such a company's shareholders can float an idea for all shareholders to consider by placing a “proposal” on the corporate proxy statement, a government-mandated document that makes required disclosures and lays out items to be considered at the company's annual meeting. Such ideas need not relate to the bottom line and can involve matters of “general social concern,” such as human rights issues or the use of recycled packaging. And the sponsoring shareholder need not own many shares: under current rules, a shareholder need only have held $2,000 of stock for one year to get on the company ballot.