SEC to Review Rules on Corporate Elections

The Securities and Exchange Commission said Monday that it might change proxy rules to help shareholders put their board candidates and policy proposals on company ballots as a way to expand corporate democracy.

The announcement came as the SEC said it upheld a previous decision that allowed Citigroup Inc. to refuse a shareholder vote on changing the bank’s process to elect board members.

Though the Citigroup decision was seen as a blow to shareholder advocacy groups, some cheered comments by SEC Chairman William H. Donaldson, who said, “The time has come for a thorough review of the proxy rules and regulations to ensure that they are serving the best interests of investors.”

The SEC ordered a staff review of corporate elections by July 15, with new rules possible before company annual meetings in 2004.