WASHINGTON (CN) - Shareholders of companies based in states that allow shareholders to nominate individuals and slates to serve as directors on corporate boards will get a boost from a proposed Security and Exchange Commission rule that will require corporate proxy materials to include shareholder nominees.
This so called "proxy access" will only apply to corporations in states in which shareholders may nominate corporate board members.
Not just any shareholder nomination will be included. Only significant, long-term shareholders will qualify to have their nominations included in proxy materials, keeping special interest or activist nominations off the materials, a concern of corporate boards and major shareholders.
Shareholders must own at least 3 percent of a company's shares for the previous three years before they can have their nominations placed on the proxy notices.
The increased proxy access was made possible after enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act which allowed the SEC to make rules requiring shareholder access to proxy materials. The rule is generally effective Nov. 15.
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