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U.S. Securities and Exchange Commission

Speech by SEC Commissioner:
Moving Toward More Informed Shareholder Voting


Commissioner Luis A. Aguilar

U.S. Securities and Exchange Commission

Open Meeting
Washington, D.C.
December 16, 2009

Good morning. Before I start, let me add my voice to the others on the dais that have thanked our staff for the hard work that is reflected in the recommendations that are before us. I support these proxy enhancement initiatives because these rules will enable shareholders to make better assessments of the companies that they own and to make more informed voting and investment decisions.

Because of these rules, in the upcoming proxy season, shareholders will be better positioned to assess the following:

  • the quality of the board's decision-making on executive compensation issues,
  • if the company's compensation policies create risks,
  • whether a board member or nominee for a board seat is a good fit for the company,
  • if board leadership is independent of management, and
  • the company's commitment to developing and maintaining a diverse board.

In addition, the new rules will require more timely public disclosure of the results of shareholder meetings.

I am happy to support these rules.

Out of all of the rules being adopted, I want to highlight one rule in particular. The Commission for the first time is adopting a rule that is an important first step to aiding an investor's ability to assess a company's commitment to developing and maintaining a diverse board. In so doing, the Commission is answering investor requests that have spanned a decade.

Specifically, the rule would require a company to disclose

  • whether diversity is a factor in considering candidates for nomination to the board of directors,
  • how diversity is considered in that process, and
  • how the company assesses the effectiveness of its policy for considering diversity.

This rule resulted from the repeated efforts of investors. For example, in 2003, the Commission did a rulemaking regarding nominating committees that did not mention diversity, and nonetheless the Commission received a significant number of letters requesting that the Commission require this disclosure. This time around, in response to our request, we were deluged with letters. These letters were overwhelmingly supportive, with approximately 90% expressing support for disclosure of information related to race and gender diversity on the board.

We received letters from persons and organizations representing over $3 trillion in assets advising us that information about board diversity is something they find important in their assessment of companies that they own. When such a sizeable portion of the U.S. capital markets tells the Commission that they seek diversity-related information for their decisions, it is clearly material. As a result, it is incumbent on the SEC, under its mandate to promulgate regulations in the public interest, to respond to the needs of investors.


I am proud to be part of a Commission approving this package of rule amendments, where we will be acting consistent with the best traditions of the agency, by providing shareholders with information material to their voting decisions.

I am happy to vote in favor of these rules.


Modified: 12/16/2009