Corporate Governance

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The SEC adopted rules in November to improve public companies’ disclosure of the processes they follow in appointing directors and the means by which securities holders can communicate with them ( www.sec.gov/rules/final/33-8340.htm ). Among the rules’ provisions—which took effect January 1—are, for example, requirements that each company disclose

Whether members of the committee nominating directors satisfy independence requirements and what minimum qualifications and standards the company expects of director nominees.

Whether the company has a process by which shareholders can communicate with directors and—if not—an explanation why and whether the company screens such communications and—if so—in what way.

The commission also approved rules the New York Stock Exchange and the Nasdaq stock market adopted to strengthen listed companies’ corporate governance standards ( www.sec.gov/rules/sro/34-48745.htm ). They tighten the definition of director independence and require the majority of a listed company’s board members to comply with the stricter standards. The rules also mandate and facilitate independent director oversight of corporate governance, auditing, director nomination and compensation functions.management control systems. Comments are due by February 4.