After all of the hoopla concerning whether HP could exclude a shareholder proposal that would enable shareholders under certain circumstances to nominate director candidates on HP's proxy statement, the proposal finally went to vote last March. The proposal garnered 39% of the shareholder vote. Interestingly, both sides declared victory.

Opponents of the proposal pointed out that the vote fell far short of the two-thirds necessary to pass the proposal, and hence insisted that the vote was a sign that shareholders do not believe it is necessary or appropriate for other investors to have access to the corporation’s proxy.

Advocates of the proposal insisted that the level of support was strong, particularly because first-time votes often receive relatively low levels of shareholder support. Thus, advocates argued that the vote should encourage other investors to support similar proposals. Proponents also maintained that the vote should serve as a sign to the SEC that shareholders desire the SEC to renew its support of the previously tabled rule allowing shareholders to have access to the corporate ballot.

Since the vote occurred, I have been puzzling over how to interpret the result. On the one hand, it is certainly possible that the vote represents an important first step that will build in momentum. In this regard, it may signal that shareholders can and will use enhanced power. On the other hand, it seems like the vote is a disapointment to those who support increased shareholder power. Indeed, the result appears to reveal that shareholders are in fact reluctant to allow their fellow shareholders to exercise increased power within the corporation. From this perspective, one wonders why HP expended so many resources seeking to exclude the proposal. One also wonder if the gains made by recent shareholder activism will have any significant impact on corporate governance.

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