Investors Win Rights at US Companies
Byline: Kit Bingham
The US Securities and Exchange Commission (SEC) plans to make it easier for big investors in US companies to nominate director candidates.The commission recommended in a report on proxies published last week that companies disclose more detail about how board candidates are nominated and indicate how shareholders may communicate with directors.
A third recommendation would allow investors to nominate directors in instances where it could clearly be shown that a company had ignored its shareholders. If a company, for example, failed to act on a shareholder proposal that had received a majority vote or if a significant proportion of shareholders voted against existing director candidates, then shareholder access to the nomination process would be triggered.
The Business Roundtable, representing the interests of the largest US companies, says it supports the first two proposals.
John Castellani, president of the roundtable, says: "The devil is in the detail. The test is whether we end up with better corporate governance."
The SEC's report noted that all companies and executives who responded to the consultation were opposed to modifying the existing proxy rules. …