House Passes New Corporate Governance Law for Chesapeake Energy
The Oklahoma House on Tuesday approved a bill that would change state laws governing how the directors of public companies are elected.
Chesapeake Energy is pushing for the new law, which would undo 2010 legislation the Oklahoma City natural gas giant itself helped write. The previous law mandated staggered elections of directors at public companies, a corporate governance strategy designed to prevent a takeover of a company’s board.
Of course this is exactly what happened at Chesapeake, and the 2010 law unintentionally affected other companies. A legislative fix was rolled out last year to exempt those companies from the law. Now Chesapeake’s new directors want out, too. If a new law isn’t passed, Chesapeake’s new directors say they’ll reincorporate the company in Delaware.
Speaking on the House floor, Rep. Cory Williams, D-Stillwater, said this is a good example of why laws shouldn’t be written for singular corporate interests.
“We’re changing our corporation laws on a yearly basis to situate whoever brings the most lobbyists down to the Capitol,” he said.
The 2010 law unintentionally affected other companies like ONEOK and OG&E. A legislative fix was rolled out last year to exempt those companies from the law.
The House approved HB 1646 on a 70-24 vote. The bill, by Rep. Fred Jordan, R-Jenks, now goes to the Senate for consideration. Two similar measures have been filed in the Senate — SB 249 and 594 — both authored by Sen. President Pro Tem Brian Bingman, R-Sapulpa.