SEC Approves Proxy Access Rule

In a move hailed as empowering investors, the Securities and Exchange Commission voted 3-2 to allow investors who meet certain criteria to nominate directors, and to mandate that publicly held companies include these candidates’ names on shareholder proxy statements. In order to nominate board members, investors must own at least three percent of a company and must have met this ownership requirement for three consecutive years. The rule enables shareholders to nominate up to 25 percent of a company’s board. Initially, the rule applies only to large cap companies, providing companies with less than $75 million in market capitalization an exemption for three years. According to Business Week, the Chamber of Commerce, which opposes the rule, is considering filing a lawsuit in response.