If shareholders are to receive increased power on corporate boards, as a new proposal suggests, it will not be before a serious public discussion by the Securities and Exchange Commission examines the pros and cons.
SEC Chairman William Donaldson has introduced a "proxy access" idea, which would make it mandatory for companies to, on proxy statements, place the names of people nominated by shareholders. Apparently, the proposal has created a chasm among SEC members.
"Its very likely we will have a round-table," SEC spokeswoman Laura Cox told Reuters. She did not know a date.
Domination of boards by top executives has been called into question, especially amid the scandals that have hit both the New York Stock Exchange itself and the $7 trillion mutual fund industry.
CEO lobbying groups, the U.S. Chamber of Commerce and two of the three Republican SEC commissioners, are against the proposal. Two Democrats on the SEC and Donaldson, a Republican, are for it. That means a vote today would likely create a 3-2 victory for Donaldsons proposal, according to sources.