U.S. investors may win more rights to influence boards
Giving shareholders the ability to place their director nominees onto corporate proxy statements will give stockholders more say on how companies are run, say activists.
"Corporate boards are the first line of defense to some of the excesses that led to the global financial crisis," says the Council of Institutional Investors, which represents public, union and corporate pension funds that hold more than $3 trillion in assets.
Demand for proxy access increased after the government shoveled billions of dollars in taxpayer money to bail out big companies like AIG and Bank of America.
The new plan would require shareholders to hold at least 3 percent of the company's stock for a minimum period of three years in order to nominate a director, according to Reuters.Companies with less than $75 million in market capitalization could be given a three-year delay to comply with the proxy access rule.
Shareholders are currently able to nominate their own directors but must wage a proxy fight in order to do so.