On August 25, the Securities and Exchange Commission, in a partisan three-to-two vote, approved its long-awaited access-to-the-proxy rule. The rule will allow any shareholder or group of shareholders representing three percent of outstanding shares and having held them for three years to nominate directors in board elections.

As a practical matter, this means that labor unions as well as major environmental organizations and other political activists will soon be organizing to win seats. At stake will be whether boards reflect the interests of shareholders as a whole or those political interests. Many corporate managements will feel compelled to run the equivalent of internal political campaigns in order to protect the integrity of their boards.

Last November I co-authored an article on this topic in The Wall Street Journal. You can find it here.