New York-based insurance giant American International Group Inc. (AIG) is now the latest major financial services firm to give shareholders a greater voice in nominating directors to its board.
AIG announced that its board has amended the company’s by-laws to provide shareholders with “proxy access,” which allows certain shareholders to propose their own nominees for board seats in the company’s proxy circular. Under the revised by-laws, a shareholder, or a group of up to 20 shareholders, that have owned at least 3% of AIG’s outstanding common stock continuously for at least three years, will be able to nominate either two candidates, or 20% of the board, whichever is greater.
The move by AIG follows a similar decision by fellow New York-based firm Goldman Sachs Group Inc. late last month. AIG’s board “proactively adopted these amendments, reflecting its strong commitment to corporate governance best practices,” the firm says in a statement.
“We are pleased to enact proxy access for our shareholders,” says Douglas Steenland, non-executive chairman at AIG, in the statement. “The AIG board remains committed to strong corporate governance and continually evaluates AIG’s corporate governance practices to be consistent with the best interests of our shareholders.”
The push for greater access to the director nomination process has been gathering steam in corporate governance circles in recent months. The Canadian Coalition for Good Governance (CCGG) called for both public companies and policy-makers to work to enhance proxy access and improve shareholder communication in Canada as well in a paper published this past May.
In addition, the Pension Investment Association of Canada (PIAC) voiced its support for the CCGG’s stance earlier this month, saying it believes “providing shareholders in Canadian public companies with meaningful input into the director nomination process, whether by being able to influence who director nominees are, or by actually nominating directors, is consistent with a strong and well-functioning corporate governance model