SEC says companies must allow shareholders to vote on universal health coverage proposal

The Securities and Exchange Commission, in a reversal of a previous position, has told companies that they cannot exclude a health care proposal from proxy materials provided to shareholders, the New York Times reports.

The proposal -- offered by religious groups, labor unions and other shareholders -- asks companies to adopt "principles for comprehensive health care reform."

Many companies have attempted to exclude the proposal from proxy materials for their annual shareholder meetings this year. During the last few months, SEC has told several companies -- such as Boeing, General Motors, United Technologies, Wendy's International and Xcel Energy -- that they must include the proposal in proxy materials.

SEC rules do not require companies to allow shareholders to vote on proposals that address issues "relating to the company's ordinary business operations." However, SEC said that companies must allow shareholders to vote on "significant social policy issues." In the past, SEC has allowed companies to exclude similar health care proposals from proxy materials, but the commission appears to have reversed that position based on "changing societal views" on the issue.

According to the Times, the proposal seeks to "draw the nation's largest corporations deeper into a debate over the future of health care" and might help "bridge the divide that has frustrated earlier efforts to cover the uninsured." Many companies have opposed such efforts in the past, but "businesses of all sizes are clamoring for relief from high health costs and have concluded they cannot solve the problem by themselves," the Times reports (Pear, New York Times, 5/27).