General Electric to allow shareholders to nominate directors
By Sarah N. Lynch
WASHINGTON (Reuters) - General Electric Co (GE.N: Quote) will allow shareholders to nominate their own corporate directors, becoming one of the few companies to adopt proxy access reforms in a move that could pave the way for others.
The company said the new bylaws, which went into effect Feb. 6, will allow a single shareholder or a group of up to 20 shareholders who own more than 3 percent of the company's stock for at least three years to nominate up to 20 percent of the board's directors.
GE's move, disclosed in a filing with the U.S. Securities and Exchange Commission on Wednesday, comes at a time when regulators at the SEC are starting to more closely scrutinize proxy reforms in general.
“GE just taught corporate America a lesson in what a responsive board looks like," said New York City Comptroller Scott M. Stringer, who oversees the city's pension funds and has filed dozens of shareholder proposals at other companies to permit proxy access.
"Voluntarily implementing proxy access is a sign that the push for a significant voice in the boardroom is breaking through," he added.
Several years ago, the SEC under then-chair Mary Schapiro adopted rules requiring public companies to let shareholders nominate directors to corporate boards if certain thresholds were met. Schapiro is now on the board of GE.
The U.S. Chamber of Commerce and the Business Roundtable, which represent companies' interests on Capitol Hill, successfully challenged the rules in court, citing concerns that such rules could advance the agendas of activist investors, who buy stakes in companies and lobby for management and other changes.
In an emailed statement, GE said it has "always emphasized shareowner accountability, and proxy access is another tool to provide that accountability." Continued...