The Securities and Exchange Commission has approved new rules adopted by the New York Stock Exchange and the Nasdaq Stock Market requiring widespread strengthening of corporate governance standards for listed companies.

The new rules establish a stricter, more detailed definition of independence for directors and require the majority of members on listed companies’ boards to satisfy that standard. In addition, the rule changes include a number of provisions that require and facilitate independent director oversight of processes relating to corporate governance, auditing, director nominations, and compensation.

SEC chairman William Donaldson said, “These rule changes are at the core of a broad movement by our markets to enhance the corporate governance practices of the companies traded on them and I congratulate the NYSE and the NASD for their efforts. Investors will recognize significant benefits from these actions today and long into the future.”