Should shareholders get more power?
Filling out a proxy ballot
TEXT OF STORY
Kai Ryssdal: True confessions time. How many of you vote? Not in presidential or even municipal elections. We're talking here about corporate elections. You get those proxy ballots in the mail every now and then. Chances are they go right into the trash. But they're a bigger deal for institutional investors. Today the Securities and Exchange Commission considered new rules that would give shareholders more influence over a company's board of directors. Marketplace's Jeff Tyler has the details.
Jeff Tyler: As it stands, only those already serving on a company's board can nominate directors to lead the company. Today the SEC decided to consider two proposals: One would reaffirm the status quo. The other would permit shareholders who meet certain requirements to propose changes that would allow them to nominate their own directors.
Les Greenberg: I would call it corporate campaign finance reform.
That's Les Greenberg with the Committee of Concerned Shareholders. He views the ability of investors to nominate candidates for the board as an important check and balance on executive performance.
Greenberg: If a director did something wrong, or wasn't doing something right, he should be accountable to the shareholders. If the shareholders cannot nominate their own candidates, then there's no accountability.
Business groups argue that giving shareholders more power to challenge the directors would be expensive and an unnecessary burden.
David Hirshmann is senior vice-president with the U.S. Chamber of Commerce.
David Hirschmann: We don't believe that additional rights for shareholders in this area are needed, because we believe they will be abused by special interests who really just want to use them as leverage to advance narrow agendas and not advance the broader shareholder interests.
The proposal to exclude shareholder nominations and the proposal to allow changes that could result in shareholder nominations are now both open to comment. The public has 60 days to weigh in.
I'm Jeff Tyler for Marketplace.