WASHINGTON – The Securities and Exchange Commission on Wednesday approved changes that make it easier for shareholders to nominate directors of public companies.

The 3-2 vote allows groups that own at least 3 percent of a company’s stock to put their nominees for board seats on the annual proxy ballot sent to all shareholders. The new financial overhaul law enacted last month formally gave the SEC the authority to make the change.

Under the current system, investors must appeal to shareholders at their own expense if they seek new directors on a company’s board or a bylaw change.

The new policy was long sought by investor advocates. But business groups, including the U.S. Chamber of Commerce and a group representing CEOs of large corporations, oppose it. The panel’s two Republican commissioners voted no. One of them warned that it would likely be overturned by a court.

The change comes as investors are angry about risks corporations are taking for short-term profit gains and extravagant compensation packages for executives. Getting candidates on the board gives supporters a better shot at influencing company policy.


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