SEC OKs rule change
The Associated Press
WASHINGTON — Federal regulators moved Wednesday to make it easier for major shareholders to install directors on company boards over opposition from corporate CEOs — an effort to make companies more accountable.
The Securities and Exchange Commission, tentatively adopting the far-reaching proposal at an open meeting, recognized the opposition of CEOs who want to keep the status quo and the administrators of big pension funds who say the plan doesn’t go far enough.
The commissioners voted 5-0 to open the proposed rules to public comment for 60 days. If they are finally adopted, contested board elections could not take place under them until the spring of 2005.
The proposal was crafted to avoid the election of “special-interest” directors beholden to the shareholder groups that nominated them. It would require evidence of significant investor dissatisfaction with the company and nominated directors’ independence from the groups, said Alan Beller, director of the SEC’s corporation finance division.