A bill of rights for more transparency and governance has been presented to the US Senate. With many echoes of the South African King Code on Corporate Governance it attempts to formalise risk, proxy and remuneration issues.
May 19, 2009
The highly anticipated Shareholder Bill of Rights Act of 2009 has reportedly been introduced in the Senate today and press releases opposing and supporting the legislation are already flying.
As Compliance Week has reported, the bill, sponsored by New York Democrat Charles Schumer, would, if passed, require companies to:
- Provide an annual non-binding shareholder vote on executive compensation;
- Provide shareholders a vote to approve golden parachutes;
- Give shareholder access to the proxy for board nominations;
- Split the chairman and chief executive roles;
- Hold annual director elections;
- Implement majority voting for directors and
- Establish risk committees comprised of independent directors
The Council of Institutional Investors issued a statement applauding the Act, which it says would “go a long way toward making boards of directors and managers of public companies more accountable to shareowners.”
Meanwhile, the Business Roundtable issued its own statement, in which its President, John Castellani, calls the bill “an unnecessary intrusion” into matters governed by state corporation law and matters currently being addressed by the Securities and Exchange Commission, stock exchanges, and public company boards.
The text of the bill is available here, courtesy of Davis Wright Tremaine’s Corporate Finance Law Blog.