In response to concerns over the cozy relationships between some boards of directors and executives at public companies, the SEC has reformed its guidelines for shareholder voting (proxy voting) so that significant long-term shareholders can “. . . under certain circumstances, include a nominee or nominees for director in company proxy materials.” Previously, the board controlled the ballot. Under these circumstances, a shareholder movement to add a certain board member or defeat a proposed board member was extremely unlikely to succeed (they were extremely rarely successful). Given all the restrictions on the proposal, it seems minor, but it has created a firestorm of debate because it changes the power balance in the control of corporations. Here is the SEC’s summary of their proposal, and the public comments that argue its merits.
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