The news this week in shareholder rights is that GE joined the list of companies that have voluntarily enacted their own bylaws permitting large shareholders to nominate directors to be included on the company proxy.  

GE’s action comes in the midst of a publicly-announced campaign by the New York City Comptroller to gather support for shareholder-enacted bylaws that would do roughly the same thing.  (And a very ugly battle over such bylaws at Whole Foods, as Marcia previously posted.)

In that context, GE’s move seems like something of a Trojan horse.  By enacting its own bylaw, GE preempts any attempts by shareholders to do so.  Meanwhile, because the bylaw is director-enacted, GE can yank it at any time – like, if it feels there’s a coherent movement that threatens the current board’s dominance.  In fact, this strategy was recently on display when Rupert Murdoch announced an unsolicited takeover of Time Warner.  The first thing Time Warner’s board did was to repeal a director-enacted bylaw that permitted shareholders to call special meetings.

As a result, I’m not quite yet ready to call this a great win for shareholder democracy.