US shareholders scored one of their biggest victories in years yesterday when regulators proposed a new rule allowing them to nominate company directors.
The rule has been considered by the Securities and Exchange Commission three times in five years, but failed to pass. The commission yesterday voted to propose the rule, by three votes to two. The Republican commissioners were the two dissenters.
The SEC said it had revisited the rule because the economic crisis called into question whether boards were exercising enough oversight over companies. It said shareholders had “a fundamental right under state law” to nominate and elect directors, but were being impeded.