The U.S. Securities and Exchange Commission voted Thursday to propose rule amendments to improve the ability of shareholders to nominate directors to corporate boards.

The SEC said that the financial crisis has led many to question whether corporate directors are truly held accountable for the decisions that they make, including whether boards are exercising appropriate oversight of management, whether they are appropriately focused on shareholder interests, and whether boards need to be more responsible for their decisions regarding issues such as compensation structures and risk management. Because of these concerns, the commission says it has decided to revisit whether and how the proxy rules may be impeding the ability of shareholders to nominate and elect directors.

The SEC is proposing rule amendments that would give shareholders who otherwise are provided the opportunity to nominate directors at a shareholder meeting the ability to have their nominees included in the proxy circular. Shareholders would also have the ability to use shareholder proposals to modify the company’s nomination procedures or disclosure about elections.

“This proposal represents nearly seven years of debate about whether the federal proxy rules should support — or stand in the way of — shareholders exercising their fundamental right to nominate directors,” said SEC chairman Mary Schapiro. “Today marks the first step toward finally concluding that debate. While I recognize that there are passionate views on both sides of this issue, I hope that all interested parties will participate in the commission’s comment process. I am confident that the final rules we adopt will be better because of these comments.”

The proposals are open for a 60 day comment period.

IE