Bills: Energy company sought changes

ensure stable management and leadership. Three other states — Indiana, Iowa and Massachusetts — also mandate staggered boards. Corporate governance experts say annually elected directors are typically more responsive to shareholders.

Shareholders approved a nonbinding resolution at Chesapeake’s 2012 annual meeting to have the company reincorporate in Delaware so it would be easier to have annual director elections. The proposal, which received 53 percent of the votes, was opposed by the company’s board. Institu- tional Shareholder Services, a shareholder advisory firm, recommended the proposal, saying it could have a positive impact on shareholder rights.

“In addition, the company would join the ranks of biggest companies that are incorporated in Delaware; as a result, the company could have minimal influence over the actions of the state legislature,” ISS said in a report issued before Chesapeake’s annual meeting.

Chesapeake rolled out a series of corporate governance proposals Jan. 7 in the wake of a boardroom shakeup 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.

Chesapeake spokesman Michael Kehs said the company would not comment on the proposed legislation beyond what it said in regulatory filings.

Bingman’s spokesman, Nathan Atkins, said the senator wants to give companies more flexibility.

“Several bills have been filed to modernize our state corporate governance laws by bringing Oklahoma into line with the gold-standard of corporate governance as seen in the state of Delaware,” Atkins said. “The pro tem’s intention is to provide businesses with opportunities to determine how best their organizations ought to be run.”

The prior changes to the law caused problems for two other large public companies incorporated in Oklahoma, ONEOK Inc. and OGE Energy Corp. Those companies, which were moving toward annual director elections, successfully sought a legislative change in 2012 to exempt them from the requirement for staggered boards.