The U.S. Securities and Exchange Commission adopted proxy disclosure enhancements today by a vote of 4 to 1. The new disclosure rules require issuers to address the effect of compensation policies on risk taking on a company-wide basis, address board nominees' qualifications on a person-by-person basis, disclose the role of diversity in board nominations, state stock compensation in aggregate grant-date fair value and describe compensation consultant relationships that could create conflicts of interest. Additionally, the new rules require faster disclosure of shareholder voting results on Form 8-K, within four business days of the vote, but allow for disclosure of preliminary results where final results are not yet available. The new rules will be in effect for the 2010 proxy season for all companies with fiscal years ending on or after December 20, 2009.

Chairman Schapiro believes these amendments will improve transparency, a key element of proper governance. She highlighted the need for transparency related to incentivized risk, which has come into focus due to the banking crisis.

Commissioner Casey, the lone dissenter, believes that the person-by-person disclosure of board nominee qualifications is unhelpful, as it will require boards to look at nominees as individuals rather than to look at all nominees as a group.

All the commissioners stressed that companies should address these new rules in a way that will be meaningful to investors and avoid boilerplate language.