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In December, 2009, the SEC approved new proxy disclosure rules to “help investors make more informed voting decisions” (effective February 28, 2010).

While the new rules will likely result in more lengthy proxy statements, shareholders may find that for some companies the information provides new insight into how corporate boards function. Companies will now have to provide additional background information on directors, and disclose the experience, qualifications, attributes or skills that qualify a particular individual to serve on the board. In addition, a company will have to disclose the board leadership structure it has chosen and the reasons that structure is appropriate, disclose its consideration of diversity in the director selection process, and describe the board’s role in risk oversight.

Other changes relate to disclosure about the relationship of employee compensation policies and practices to risk management, stock and option grants to executives and directors, and potential conflicts of interests of compensation consultants. The new rules also require companies to report the voting results from shareholder meetings four days after the meeting in a Form 8-K filing.

Source: PROXY Governance Spotlight, December 16, 2009