State Legislation Filed to Change Chesapeake Corporate Governance Law
Lawmakers in Oklahoma’s House and Senate have filed bills that would change laws that govern how public company directors are elected.
Chesapeake Energy helped write the 2010 law, which requires staggered elections for directors of publicly traded companies. Staggered terms are uncommon among publicly traded companies, corporate governance experts told StateImpact, but they can help company management guard against hostile takeovers.
Which is exactly what happened at Chesapeake. The Oklahoman’s Paul Monies on why the new legislation is needed:
Chesapeake rolled out a series of corporate governance proposals Jan. 7 in the wake of a boardroom shake-up last summer that saw CEO Aubrey McClendon relinquish his post as chairman. The company’s new board said it would pursue a change in Oklahoma law to allow annual director elections. If that fails, the company plans to reincorporate in Delaware.
Senate President Pro Tem Brian Bingman, R-Sapulpa, filed a pair of bills that would change the law: Senate Bill 249 and SB 594.
The bills cover the same section of law, but one has an emergency clause, meaning the legislation goes into effect immediately as soon as it’s signed into law, The Oklahoman reports.
Similar legislation, House Bill 1646, was authored by Rep. Fred Jordan, R-Jenks.
“The pro tem’s intention is to provide businesses with opportunities to determine how best their organizations ought to be run,” Bingman’s spokesman told the paper.
Chesapeake declined The Oklahoman’s request for comment on the proposed legislation. The company denied a similar request by StateImpact’s on Jan. 8.