Proposal to Allow Shareholders to Oust Board Directors

US regulators have received a record number of comments on controversial proposals that would allow shareholders more easily to oust board directors, with the vast majority in favour of changes that are set to revolutionise company annual meetings.

However, corporate America’s leaders remain implacably opposed to the plans and stepped up their opposition ahead of yesterday’s dead line for comments to be submitted to the Securities and Exchange Commission.

Some 12,000 letters have been posted on the website of the SEC, the chief US financial regulator, since the body issued its plans two months ago. The previous record was 7,000 letters regarding plans to force institutional investors to disclose how they have voted at shareholder meetings.

Christiana Wood, an investment officer at the Calpers retirement fund in California, wrote that the plans were “perhaps the most important rule the SEC has put forth for the investing public in decades”.

This month a coalition of investors said it planned to use the new shareholder powers, if passed, in a effort to oust board members of Marsh & McLennan, the parent company of Putnam Investments. Putnam is one of the mutual fund groups at the heart of the scandal over controversial trading practices.