The Securities and Exchange Commission (SEC) voted Wednesday, August 25, to give shareholders a greater say in nominating corporate boards of directors at publicly-traded companies starting in 2011. The agency passed the controversial rule by a 3-2 vote, with both Republican commissioners casting dissenting votes.
The SEC proposed the rules last year, and since then has received more than 600 comments. SEC Chairman Mary Schapiro stated before the vote that “the concept that shareholders can directly participate in the director nomination process–without having to mount a proxy contest–has been debated for over 30 years.” In fact, she continued, “this is the fourth time in recent memory that the Commission has considered the question of amending our proxy rules to address so-called ‘proxy access.’ “
Some of the debate over the proposed rules last year was whether the SEC had the authority to adopt such rules, Schapiro said. But the Dodd-Frank Wall Street Reform and Consumer Protection Act, she said, “specifically states that the SEC has authority to adopt rules that require companies to include shareholder board nominees in company proxy materials.”