Washington (Aug. 7, 2003) — The Securities and Exchange Commission voted unanimously for a proposal that would mandate additional disclosure by companies regarding their board selections.
Among requirements contained in the SEC measure are:
• 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 also passed stipulates that SEC companies would have 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.
"We intend to continue our work to improve the proxy process this Fall by considering additional proposals regarding enhanced shareholder access to the proxy process for nomination of directors," SEC chairman William Donaldson said in a statement.
The SEC will solicit comments on Wednesday's proposals over the next 30 days.
— WebCPA staff
