Using 'Plain English' in Proxy Proposals

Abstract

Gaining access to a corporation's annual meeting proxy statement is the only practical way to communicate with fellow shareholders on issues of corporate policy. But many proxy proposals make for difficult reading. Shareholders aren't likely to vote in favor of a proposal they can't understand. The author drafted a shareholder proposal in plain-English for inclusion in the annual meeting proxy statement of Michigan's largest bank. On the Flesch readability scale, the proposal scored 51. That's on a par with Time and Newsweek. In contrast, a representative sample of the bank's previous year's proxy statement scored -12 (more difficult than the Harvard Law Review). This article explains the author's drafting considerations and the result he achieved (the bank voluntarily adopted the author's proposal, avoiding a proxy contest).

Keywords: Plain English, drafting documents, proxy proposals