Washington (Nov. 21, 2003) -- The Securities and Exchange Commission adopted rules that would improve disclosure to investors regarding the nominating committee processes at public issuers, and also the ways by which stockholders may communicate with directors at the companies in which they invest.
The new disclosure standards require companies to disclose:
• Whether a company has a separate nominating committee and, if not, the reasons why it does not and who determines nominees for director;
• Whether members of the nominating committee satisfy independence requirements;
• Acompany's process for identifying and evaluating candidates to be nominated as directors;
Whether a company pays any third party a fee to assist in the process of identifying and evaluating candidates.
The standards also require companies to disclose new information regarding shareholder communications with directors, including:
• Whether a company has a process for communications by shareholders to directors and, if not, the reasons why it does not;
• The procedures for communications by shareholders with directors;
• Whether such communications are screened and, if so, by what process; and
• The company's policy regarding director attendance at annual meetings and the number of directors that attended the prior year's annual meeting.
-- WebCPA staff
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