Financial Regulatory Forum

Shareholders need real voice: U.S. SEC chief

By Reuters Staff
November 4, 2009

U.S. Securities and Exchange Commission Chairman Mary Schapiro bites her lip as she listens to questions during her testimony before the Senate Banking Committee on Capitol Hill in Washington, June 22, 2009.    REUTERS/Jim Young    (UNITED STATES POLITICS BUSINESS IMAGES OF THE DAY)   NEW YORK, Nov 4 (Reuters) – The top U.S. securities regulator on Wednesday called on Corporate America to upgrade its proxy voting practices to ensure shareholders a greater voice in governing the companies they own.

“It is imperative that our proxy voting process work,” Securities and Exchange Commission Chairman Mary Schapiro told the Practising Law Institute conference in New York.

“The failure to reform the shareholder voting process in the past has, in my view, affected company and board responsiveness to shareholder concerns,” Schapiro said.

Schapiro said her agency was eyeing the mechanics for shareholder voting and vowed to give shareholders an easier and cheaper way to nominate corporate directors.

Investors have long clamored for a way to influence the composition of the corporate board — an issue known as proxy access. Those demands increased after the government used billions of dollars in taxpayer funds to prop up companies including insurer AIG and Bank of America.

The SEC has proposed giving investors who own as little as 1 percent of a large company’s shares the ability to nominate directors. Schapiro said she hoped the SEC would consider final rules early next year and that the proxy access “goes to the heart of good corporate governance.”

Democratic lawmakers hope to underpin Schapiro’s efforts by affirming the SEC’s authority to grant investors access to the proxy. (Reporting by Rachelle Younglai, editing by Maureen Bavdek) ((rachelle.younglai@thomsonreuters.com +1 202 898 8411; Keywords: SEC PROXY/

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