Standards & Guidance
North Dakota enacts shareholder friendly law
North Dakota has passed the US’ first
“shareholder friendly” law, which provides a
voluntary governance structure designed to give investors greater rights than
they currently have under other state laws.
Among the law’s provisions are: majority voting in the
election of directors; advisory shareholder votes on compensation reports;
reimbursement of shareholder costs in successful proxy contests; and separation
of the chairman and chief executive roles.
The new structure will be available for companies
incorporated under North Dakota law after 1 July 2007 that elect to be subject
to the new law by including a provision to that effect in their articles of
association.
One supporter of the new legislation is Jim Poolman,
insurance commissioner of North Dakota,
who argued: “the new law is an important step forward for our economy and the
health of our securities markets”.
Links
“Shareholder Friendly” Law
Insurance Commissioner of North Dakota
May 2007
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