Bank of America Shareholders Back Majority Vote System for Directors

The non-binding measure asks the Charlotte company to require nominees to the board to gain a majority of shareholder votes, which would replace the current requirement that they only receive a single vote, according to a report by the Charlotte Observer.

Management had said the measure was poorly constructed, because the board could be forced to appoint its own members if an election did not produce a clear winner, the paper reported.

 The proposal gained a 56% majority of the vote, so chief executive and board chairman Ken Lewis said directors would “carefully consider” making a change.

The proposal was led by the United Brotherhood of Carpenters and Joiners of America and is part of a larger push mostly led by unions — who have power over many large companies because of their retirement funds — to make it harder to win a seat on a company’s board.

Making it harder to win a board seat is the most common goal of shareholder proposals at annual meetings this year, according to Patrick McGurn of Institutional Shareholder Services Inc., a Rockville, Maryland, firm that tracks shareholder votes.

According to the newspaper’s report, about 70 companies have adopted a majority vote requirement, and about 80, including Wachovia Corp., have adopted a requirement that allows the board to decide, when candidates fall short of a majority, if they should get a seat.