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Assembly Approves 4-Bill Diegnan & Pinkin Package to Make New Jersey’s Corporate Laws More Modern & Competitive

(TRENTON) – The full Assembly cleared on Thursday a four-bill package sponsored by Assembly Democrats Patrick Diegnan and Nancy Pinkin as part of a continued effort to modernize New Jersey’s corporate governance laws to promote economic growth, create jobs and make New Jersey more competitive.

“These measures will continue to ensure New Jersey remains a leading place for corporations and the economic growth and jobs they bring,” said Diegnan (D-Middlesex), who has sponsored numerous corporate reforms in recent years to make New Jersey’s laws more competitive. “These are all common sense steps to keep New Jersey competitive in an ever-changing and challenging global marketplace. I view these bills as, quite simply, the right thing to do.”

The bills:

  • A3612 (Diegnan,Pinkin)- Clarifies that corporate directors may approve actions without a meeting by electronic transmission.
  • A3614 (Diegnan,Pinkin)- Revises applicability of law concerning derivative proceedings and shareholder class actions
  • A3615 (Diegnan,Pinkin)- Permits corporations to impose reasonable limitations or conditions on use or distribution of books and records by shareholders.

The sponsors note that this bill would clarify corporate directors may approve actions without a meeting by electronic transmission. They further note that in addition to the historic practice of approving action by written consent, directors already approve action by electronic transmission. This bill was drafted in light of changes in technology to clarify that directors may use electronic transmissions to approve corporate actions.

  • A3616 (Diegnan,Pinkin) – Revises circumstances in which certain corporate officers are provided immunity from liability.

“Amid significant changes in technology that have occurred and the related ease by which materials may now be used and disseminated, this bill would allow corporations to continue a common practice that has developed to condition the receipt of requested materials on, for example, the demanding shareholder agreeing to customary confidentiality obligations,” Pinkin said. “However, the bill is not intended to provide a corporation with a right to deny access to a demanding shareholder of materials which the demanding shareholder is otherwise entitled.”

The bills were each approved 72-0. The Assembly Financial Institutions and Insurance Committee released the measures last December.