The U.S. Securities and Exchange Commission approved rules on Wednesday that are designed to improve corporate disclosure regarding risk, compensation and corporate governance matters when shareholder voting decisions are made.

In particular, the new rules require disclosures in proxy and information statements about:

• the relationship of a company’s compensation policies and practices to risk management;

• the background and qualifications of directors and nominees;

• legal actions involving a company’s executive officers, directors and nominees;

• the consideration of diversity in the director nomination process;

• board leadership structure and the board’s role in risk oversight;

• stock and option awards to company executives and directors; and

• potential conflicts of interests of compensation consultants.

The new rules, which will be effective Feb. 28, 2010, also require quicker reporting of shareholder voting results.

“Good corporate governance is a system in which those who manage a company — that is, officers and directors — are effectively held accountable for their decisions and performance. But accountability is impossible without transparency,” said SEC chairman Mary Schapiro. “By adopting these rules, we will improve the disclosure around risk, compensation, and corporate governance, thereby increasing accountability and directly benefiting investors.”

IE