The Securities and Exchange Commission has approved rule proposals that would require companies to include shareholders’ nominees for director positions, in their proxy materials.

The proposed requirement would arise in cases where: state law establishes the right of a shareholder to nominate a candidate for such an election; and, one or more specified events has occurred, providing evidence of shareholder dissatisfaction with the effectiveness of the company’s proxy process.

The number of nominees about whom a company would be required to include information in its proxy materials would vary depending on the size of its board of directors. Companies having eight or fewer board members would be required to include information regarding one nominee, companies with between nine and 19 board members would be required to include information regarding two nominees, and companies with boards of 20 or more members would be required to include information regarding three nominees.

SEC chairman William Donaldson said, “This year, for the first time in its history, the commission has proposed rules that would provide shareholders a procedure that promotes access to the proxy process. Today’s proposed rules, which build upon rules proposed in August, would strengthen the proxy process, directly benefiting shareholders, while carefully and thoughtfully balancing concerns about proper management and operation of our public companies. We look forward to receiving public comments on today’s proposals as we continue working to improve the proxy process for companies and shareholders.”

The commission is soliciting comment on today’s proposals for a 60-day period.