Administration June 6, 2002

Nasdaq Submits Corporate Governance Rules to SEC

June 6, 2002 (PLANSPONSOR.com) - Nasdaq Stock Market, Inc. announced several key corporate governance rule changes for companies listed on the exchange, which will be filed with the Securities and Exchange Commission (SEC) tomorrow.
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The changes, which include a call for companies to hold shareholder votes on all stock option plans for company officers or board members and a $60,000 cap on an independent board member’s compensation, were approved by Nasdaq’s board late last month.

The proposed changes follow a review ordered by SEC, which is responding to the wave of accounting scandals that have been uncovered at some of America’s largest companies.

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The Nasdaq, also announced the next round of corporate governance reforms to be examined this month. These include:

  • having a majority of independent directors on corporate boards,
  • compensation committees made up solely of independent directors,
  • a “cooling-off” period during which former auditors would be precluded from serving on corporate audit committees, and
  • expanding the scope of audit committee authority.

The new rules will soon be published in the Federal Register and will be subject to comment periods, and could be implemented for Nasdaq companies later this summer, the exchange said in a press release.

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