Stockholders Rights are Protected

NACA Hails Passage Of Electronic Communications Act That Allows Internet Participation But Continues To Require Direct Annual Meetings

(Boston, MA) – In a stunning defeat for AIM and EMC, the Massachusetts Senate eliminated the sections of the Electronics Communication Act that would have allowed corporations to not have direct, in-person annual meetings. It is one of the extremely few times ever that the Massachusetts legislature rewrote a bill that had already been approved by both the House and Senate and was going to enactment without opposition.

The Neighborhood Assistance Corporation of America (NACA) spearheaded the campaign to protect shareholder rights.  The amended Shareholders Act, passed by the Massachusetts State Senate today, allows corporate stockholders to participate in annual meetings and corporate voting through the internet but requires all meetings of stockholders to be held at a “designated place.” Last week, the Senate was set to enact legislation that would have allowed corporations to hold their annual meeting “solely by means of remote communications.” 

This would have allowed corporate CEOs to hold annual meetings over the Internet and avoid face-to-face contact with stockholders.  The bill was set to pass with little or no discussion, but following strong opposition from NACA, United for a Fair Economy, Pension Fund Administrators, and many others concerned with shareholder rights and corporate responsibility, the act was amended

NACA CEO Bruce Marks stated his approval of the Act’s new language. “This new wording mandates greater shareholder participation without allowing the CEOs to escape face-to-face meetings with their stockholders. Corporate CEO’s like Fleet’s Terrance Murray and EMC’s CEO cannot hide from their decisions that impact their stockholders and our communities. This represents a victory for the shareholders of Massachusetts corporations.  I want to thank the hundreds of people who called their representatives to express their concern over the Act.  Without their activism, this victory would not have been possible.”

The Act still needs to pass the House with the new wording before it goes to the Governor to be signed. Marks warned that the fight is not yet over.  “We still have to make sure that the House does not try to sneak the old wording back in.  Our message to Speaker Finneran is, we are watching.”