Washington, Oct 10: US regulators, moving to boost the power of investors in the boardroom, gave initial approval on Wednesday to a plan that would let shareholders nominate board directors using official company ballots. The Securities and Exchange Commission’s decision drew criticism from big business and praise from investor activists who want to wrest control from CEOs of weak boards like those that slept through the scandals at Enron and elsewhere.
“This is going to be a very controversial proposal... No matter what we do or don’t do, not everyone will be happy,” said SEC commissioner Cynthia Glassman at an open meeting. The SEC voted unanimously to send its proposed shareholder “proxy access” plan out for 60 days of public comment, with a final vote to follow by the five-member commission.
Speaking for the Business Roundtable, a powerful Washington lobbying group for chief executives, Pfizer CEO Henry McKinnell said the SEC proposal risks “special interest groups hijacking the director election process”. “The roundtable continues to be concerned that the SEC’s rules will lead to divisive boards,” said the chief of the world’s largest pharmaceuticals manufacturer. Bureau Report