Institutional investors overwhelmingly support the Securities and Exchange Commission’s proposed rules that would open up the director nomination process, according to a survey by Broadgate Consultants Inc.
Nearly 80 percent of the 120 buy-side money managers and research professionals who responded said they believe the SEC’s proposals are a good step toward better governance.
The commission initially trotted out its recommendations last fall. But after receiving a record number of comment letters, the SEC decided to delay the issuance of its final rules, and hosted a roundtable discussion in the winter. Many observers had expected that the SEC would issue its final rules in May, but now it seems that will happen later rather than sooner.
The initial proposed rules, known as the proxy access rules, are still fairly restrictive. They require a two-step process that would take two years before certain large shareholders could nominate their own candidate to a company’s board of directors.
While pension funds have been very supportive of the proposed rules, major corporate advocates such as the Business Roundtable have aggressively lobbied against them, arguing that the rules will affect many companies that don’t deserve outside proxy access.
Other results from the survey: