FOR IMMEDIATE RELEASE
Washington, D.C., Nov. 19, 2003 At an open meeting today the Securities and Exchange Commission adopted rules that will improve disclosure to investors regarding the nominating committee processes of public companies and the ways by which security holders may communicate with directors at the companies in which they invest. These rules implement recommendations made by the Division of Corporation Finance to the Commission in its July 15 Staff Report: Review of the Proxy Process Regarding the Nomination and Election of Directors.
The disclosure requirements adopted today will enhance significantly the transparency of the nominations and communications processes of public companies and are the next step in the implementation of the recommendations in the Staff Report. The Commission has solicited public comment on other rule proposals that would implement recommendations in the Staff Report regarding the inclusion of disclosure of security holder nominees in company proxy materials.
The new disclosure standards require companies to disclose important additional information regarding a company's process of nominating directors, including:
The new disclosure standards also require companies to disclose significant, new information regarding shareholder communications with directors, including:
Chairman William Donaldson said, "The Commission today continued its efforts to improve the proxy process as it relates to the nomination and election of directors. The disclosure required by these new rules will improve the transparency of the director nomination process and means by which shareholders can work with directors at their companies. This transparency will lead to improved shareholder understanding of these processes."
The rules adopted today are expected to be available on the Commission's website within the next few days and will apply to proxy and information statements first sent or given to security holders on or after the date that is 30 days after their publication in the Federal Register.