The Securities and Exchange Commission voted unanimously to make companies more forthcoming about their board selections.
The proposal – which invites comments over the next month – would look into a number of areas, including:
• 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;
• A company's process for identifying and evaluating candidates to be nominated as directors.
A second proposal would force companies to tell shareholders more clearly just how they communicate with board members. For example, companies would have to disclose whether they have a process for communications between shareholders and directors, and if not, why not.
