Companies
Comverse to permit shareholder nominations
Comverse Technology
has set a major precedent in US governance by agreeing to introduce majority
voting and allow shareholders to nominate directors.
Under the company’s new by-laws, any shareholder that has
held a 5% stake in the company for at least two years will be able to nominate a
candidate to the board of directors.
However, should this candidate then receive less than 25%
of votes cast at the shareholder meeting, the nominator will be unable to
propose another candidate for four years.
Comverse’s move to introduce majority voting will require
directors to either be elected by the majority of votes cast or resign.
In common with the majority of US companies, Comverse
currently employs a plurality voting system, which allows directors to be
elected by less than a majority, regardless of the number of votes withheld. A
director could therefore, theoretically, be elected on one vote.
Links
Comverse Technology
May 2007
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