Under the proposal before us today, shareholders who otherwise have the right to nominate directors at a shareholder meeting will be able to have their nominees included in the company proxy ballot that is sent to all voters. Given the reality of how the proxy process works, this would turn what would otherwise be a somewhat illusory right to nominate into something that is real — and has a real chance of holding boards of directors accountable to company owners.

The U.S. Securities and Exchange Commission may let investors owning 1 percent of the biggest companies nominate directors on proxy statements....

SEC commissioners voted 3-2 [with Kathleen L. Casey and Troy A. Paredes dissenting] today to seek public comment on the proposal, which applies to companies with market values exceeding $700 million. Investors would have to own a larger proportion of shares to nominate directors at smaller companies.

Under the SEC’s proposal, shareholders would face limits on how many directors they could nominate. If a board had three members, shareholders could recommend one director. If a board had more than three members, then shareholders would be restricted to nominating 25 percent of the board.