US shareholders may choose directors
Under new Securities and Exchange Commission proposals
Shareholders in the United States may soon have the power to nominate
directors to boards.
A new Securities and Exchange Commission proposal to empower shareholders
will be voted on by public companies. A debate on whether federal proxy rules
should block shareholders’ right to nominate directors has raged for seven
Shareholders are allowed to nominate various candidates at the annual general
meeting of most companies, but these are usually overshadowed by proxy votes
cast ahead of the meeting.
The SEC proposes amendments to the rules that would allow shareholders to
nominate directors ahead of the proxy vote.
The issue is timely, as economic conditions are starting to question the
behaviour and performance of boards of directors.