While the Securities & Exchange Commission is busy with its implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act, business lobby groups are attempting to derail attempts to give the owners of US corporations similar rights to those they enjoy overseas.

The U.S. Chamber of Commerce and the Business Roundtable have filed a legal challenge to the Securities and Exchange Commission’s proxy-access rule. The rule, adopted in August after years of debate, requires companies to place the director nominees of certain shareholders – those owning at least a 3% stake for a minimum of three years – directly on proxy statements and voting ballots. Such shareholders could nominate at least one director or up to 25% of a board, whichever is greater. The SEC’s final rule on proxy access will become effective November 15.

 In a petition for review filed in the U.S. Court of Appeals for the District of Columbia Circuit, the two business groups say the rule is “arbitrary and capricious”. They argue that the rule favors large, special-interest shareholders – such as unions and labor groups – over retail, or individual, investors. They also argue that it infringes on state laws overseeing corporate boards. The business groups are relying on the same legal team the U.S. Chamber of Commerce used to successfully challenge the SEC's mutual-fund-governance rule in 2005 and again in 2006. A press release summarizing the action can be found here.

Speaking to a Dow Jones newswire correspondent, Ann Yerger, Executive Director of the Council of Institutional Investors, called the suit "a disgrace." She said that proxy access was a limited tool which may be used by large shareholders to hold corporate directors accountable. "It's just not going to be used much, if at all."