5.22.2009 The SEC proposed a comprehensive series of rule amendments to facilitate the rights of shareholders to nominate directors on corporate boards.
Public companies across the country hold elections to select members of their boards of directors, which oversee the management of the company. In most cases, the existing directors nominate the slate of candidates and the company sends information to the shareholders, through so-called proxy materials, so that those shareholders have information to vote their shares. But, because the shareholders rarely have any input into the slate of candidates, they are not always able to vote for the person they believe may be best suited to fill the post.
To address this situation, the SEC is proposing rule amendments that would provide shareholders with a meaningful ability to exercise their state law rights to nominate the directors of the companies that they own. Under the proposal, shareholders who otherwise are provided the opportunity to nominate directors at a shareholder meeting would be able to have their nominees included in the company proxy ballot that is sent to all voters. Shareholders would also have the ability to use shareholder proposals to modify the company’s nomination procedures or disclosure about elections, so long as those proposals do not conflict with state law or SEC rules.
Click http://www.sec.gov/news/press/2009/2009-116.htm to access the press release about the rule proposal.