LINDA WERTHEIMER, Host: NPR's Brett Neely reports.</s>BRETT NEELY: In principle, public companies are miniature democracies. One share equals one vote when it comes to who sits on a company's board. In practice...</s>AMY BORRUS: The board election system in the U.S. has echoes of the old Soviet Union.</s>BRETT NEELY: That's Amy Borrus, a senior vice president at the Council of Institutional Investors, which represents pension funds. Unhappy shareholders can vote for new company directors every year. But Borrus says it's an uphill battle, starting with the ballots themselves.</s>AMY BORRUS: Companies send out a proxy ballot with just the names of the directors they want you to vote for, the candidates they want you to vote for.</s>BRETT NEELY: The new SEC rules force companies to offer a place on those ballots to outside candidates. But only big shareholders who have owned 3 percent of the company for three years will have access.</s>CHARLES ELSON: It's not even a half-step. I'd say it's maybe a one-eighth step.</s>BRETT NEELY: Charles Elson is an expert in corporate governance at the University of Delaware. He says small investors are shut out by the new rules.</s>CHARLES ELSON: What it seems to suggest is only the large investors have enough sense to nominate good directors, and I don't think that's true.</s>BRETT NEELY: Brett Neely, NPR News.
The Securities and Exchange Commission voted Wednesday to make it easier for shareholders to have a say in the make up of corporate boards. New rules require individuals nominated by shareholders be included in "proxy materials" alongside the nominations of management.