New SEC Rules Require Shareholder-Nominated Directors in Proxy Statement
The SEC has adopted new rules that require issuers, including investment companies, to include shareholder-nominated directors in the proxy statement. A shareholder making the nomination must hold at least 3% of the issuer’s shares for at least the prior 3 years. The SEC adopted the rules under its new explicit authority granted by the Dodd-Frank Act. A shareholder may nominate a maximum of one director or 25% of the board, whichever is greater. The issuer will not have liability for the shareholder-provided information to be included in the proxy statement. The rule generally becomes effective with the next annual proxy.