Controversial new rules to facilitate shareholder nominations of directors at US companies have been welcomed by pension funds and corporate governance activists.
The Securities and Exchange Commission yesterday approved rules to give shareholders who own 3% of a company’s stock for at least three years the right to have their board nominee included in companies’ proxy materials. The process was prohibitively expensive prior to the ruling.
The long-debated and controversial issue went through in a 3-2 vote. “I have great faith in the collective wisdom of shareholders to determine which competing candidates will best fulfil the responsibilities of serving as a director,” said SEC Chairman Mary Shapiro.
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