"First, the proposal would require HP to amend its by-laws in order to include the proxy access provision."

Oh no. God forbid the company has to do some paperwork at the request of its owners.

"If successful, the amendment would be automatic, which mean it could pass without any input or discussion from the board."

The voters vote, and the elected officials respect the outcome? Yes, I believe that's how democracy is supposed to work.

"Second, allowing shareholders to have access to the corporation’s proxy for purpose of nominating directors could create expensive and divisive elections, potentially turning every director election into a proxy contest."

Quite right. Elections are messy. Maybe HP should just appoint a Chairman & CEO for life; that way elections can be avoided for decades at a time. Why should the owners have any say in how the company is run, anyway?

"Finally, HP already allows shareholders to participate in the director election process because the company allows shareholders to make recommendations to the board’s nominating committee."

Recommendation =/ meaningful participation.

They forgot the fifth reason: "If the company's owners are allowed to have a say in how the company is run, we might actually be accountable to someone other than our golf buddies, and get fired. Can't have that."

Gosh, HP never cited the claim made by Steve Bainbridge and other academics that shareholder nomination of directors would undermine the "more economically efficient" "authority model" of directorial powers. Didn't think of that one? Too complicated? Too embarrassed? A theory that dare not speak its name?

HP's points are the standard arguments against shareholder nominations, each of which has a series of standard responses. What caught my eye is your last paragraph. First, although you're right that cumulative voting increases the chances of a shareholder nominee being elected, I don't think that's right for majority voting. Majority voting makes it harder for both board and shareholder nominees to get elected, it seems to me. Second, how would cumulative voting and majority voting interact? My initial reaction is that they are not consistent with one another, but I haven't thought about that issue before.

Brett, you are right, the majority voting may make it more difficult for all candidates to become elected, and hence cumulative voting is really the tool that could empower shareholders at the company and make it easier for them to elect their two nominees. However, I was thinking that with a strong campaign, majority voting could serve to defeat some of the director nominated candidates, and thus that mechanism allows shareholders to exercise their voice in a different way. I also think the powers in combination give shareholders greater voice (or maybe it is bargaining power) in management discussions on issues of director candidates. Though it does seem that attempting to rely on both mechanisms during the same election could work at cross purposes.

Majority voting policies generally contain a carveout for contested elections. Assuming the definition of contested doesn't turn on the dissident's filing of separate proxy materials, plurality voting would apply if the number of candidates exceeds the number of available seats as would be true with shareholder-nominated candidates. So there shouldn't be a concern about the interaction of cumulative voting (which is meaningful only in a contest) and majority voting, which only applies absent a contest in most policies drafted during the recent wave of reforms. (I have seen some provisions that seems to be much older, perhaps even artifacts of a time when majority voting was the default, that just say a majority standard applies, all the time, to director elections, with no explanation of how the holdover issue should be resolved.)

And in the interest of full disclosure, I drafted the HP proposal.