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Commentary on CA v AFSCME

The Harvard Corporate Governance blog collects commentary from several of its resident bloggers. Money quote from Ted Mirvis:

The director-centric view won.

As for complaints elsewhere that the decision is a body blow to shareholder activism, JW Verret offers the following measured insight:

Technically this is a loss for AFSCME, but the opinion should be considered a measured victory for the shareholder activist community. A reimbursement bylaw with a fiduciary duty out exception does not eliminate all of the risk associated with funding a proxy campaign. Only proxy access to the corporate ballot can do that. But such a bylaw would significantly reduce the risk associated with funding a proxy campaign. There is a good chance that a Board’s decision to withhold reimbursement through claims that its fiduciary duty requires it would be subject to heightened review under Blasius, since the Court has accepted that this bylaw is intimately connected with the election process and candidate’s incentives to run to election.

I think that’s probably right.