[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3272 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3272

 To amend the Securities Exchange Act of 1934 to add requirements for 
      board of directors committees regarding risk management and 
  compensation policies, to require non-binding shareholder votes on 
            executive compensation, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 21, 2009

 Mr. Ellison introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To amend the Securities Exchange Act of 1934 to add requirements for 
      board of directors committees regarding risk management and 
  compensation policies, to require non-binding shareholder votes on 
            executive compensation, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Corporate Governance Reform Act of 
2009''.

SEC. 2. INDEPENDENCE OF CHAIRMAN OF THE BOARD.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 10A the following new section:

``SEC. 10B. INDEPENDENCE OF CHAIRMAN OF THE BOARD.

    ``(a) Independence Requirement.--The chairman of the board of 
directors of an issuer shall be independent.
    ``(b) Prohibition on Service as Executive Officer.--An individual 
may not serve as an executive officer of an issuer while serving as the 
chairman of the board of directors of such issuer.''.

SEC. 3. RISK MANAGEMENT COMMITTEE.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.), as amended, is further amended by inserting after section 10B 
the following new section:

``SEC. 10C. RISK MANAGEMENT.

    ``(a) Risk Management Committee.--
            ``(1) Independence required.--Each member of the risk 
        management committee of an issuer shall be independent.
            ``(2) Duties.--The risk management committee of an issuer 
        shall periodically review the risk management policies of the 
        issuer.
    ``(b) Chief Risk Officer.--Each issuer shall have a chief risk 
officer who shall--
            ``(1) establish, evaluate, and enforce the risk management 
        policies and procedures of the issuer; and
            ``(2) report directly to the risk management committee.''.
    (b) Definition.--Section 3(a) of the Securities Exchange Act (15 
U.S.C. 78c(a)) is amended by adding at the end the following:
            ``(65) Risk management committee.--The term `risk 
        management committee' means--
                    ``(A) a committee (or equivalent body) established 
                by and amongst the board of directors of an issuer for 
                the purpose of overseeing the risk management policies 
                and procedures of the issuer; and
                    ``(B) if no such committee exists with respect to 
                an issuer, the entire board of directors of the 
                issuer.''.

SEC. 4. COMPENSATION COMMITTEE.

    (a) In General.--The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.), as amended, is further amended by inserting after section 10C 
the following new section:

``SEC. 10D. COMPENSATION COMMITTEE.

    ``(a) Independence Required.--Each member of the compensation 
committee of an issuer shall be independent.
    ``(b) Duties.--The compensation committee of an issuer shall 
periodically review all compensation practices and structures of the 
issuer.''.
    (b) Definition.--Section 3(a) of the Securities Exchange Act (15 
U.S.C. 78c(a)), as amended, is further amended by adding at the end the 
following:
            ``(66) Compensation committee.--The term `compensation 
        committee' means--
                    ``(A) a committee (or equivalent body) established 
                by and amongst the board of directors of an issuer for 
                the purpose of overseeing and reviewing the 
                compensation provided by the issuer to the executives 
                and employees of the issuer; and
                    ``(B) if no such committee exists with respect to 
                an issuer, the entire board of directors of the 
                issuer.''.

SEC. 5. SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION.

    The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 14 the following new section:

``SEC. 14A. ANNUAL SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION.

    ``(a) Separate Resolution Required.--Any proxy or consent or 
authorization for an annual or other meeting for which the proxy 
solicitation rules of the Commission require compensation disclosure of 
the shareholders occurring after the end of the 1-year period beginning 
on the date of enactment of this subsection, shall include a separate 
resolution subject to shareholder vote to approve the compensation of 
executives as disclosed pursuant to the compensation disclosure rules 
of the Commission (which disclosure shall include the compensation 
discussion and analysis, the compensation tables, and any related 
material).
    ``(b) Rule of Construction.--The shareholder vote referred to in 
subsection (a) shall not be binding on the board of directors and shall 
not be construed--
            ``(1) as overruling a decision by such board;
            ``(2) to create or imply any change to the current 
        fiduciary duties of such board;
            ``(3) to create or imply any additional fiduciary duty by 
        such board; or
            ``(4) to restrict or limit the ability of shareholders to 
        make proposals for inclusion in such proxy materials related to 
        executive compensation.''.

SEC. 6. STUDY ON DIRECTOR CERTIFICATION.

    (a) Study Required.--The Securities and Exchange Commission shall 
carry out a study on the feasibility of requiring, and the logistics of 
implementing, a certification process under which an individual seeking 
to become a member of the board of directors of an issuer would have to 
first be certified by the Securities and Exchange Commission as having 
the experience and expertise necessary to carry out the functions of a 
member of the board of directors of such issuer.
    (b) Report.--Not later than the end of the 1-year period beginning 
on the date of the enactment of this Act, the Securities and Exchange 
Commission shall submit a report to the Committee on Financial Services 
of the House of Representatives and the Committee on Banking, Housing, 
and Urban Affairs of the Senate containing the conclusions of the study 
required under subsection (a).

SEC. 7. REGULATIONS AND PROHIBITION ON LISTING FOR NON-COMPLIANCE.

    Not later than the end of the 6-month period beginning on the date 
of the enactment of this Act, the Securities and Exchange Commission 
shall--
            (1) issue regulations to carry out the amendments made by 
        this Act; and
            (2) by rule, direct the national securities exchanges and 
        national securities associations to prohibit the listing of any 
        security of an issuer that is not in compliance with the 
        requirements of any portion of sections 10B, 10C, or 10D of the 
        Securities Exchange Act of 1934.

SEC. 8. EFFECTIVE DATE.

    The amendments made by this Act shall take effect with respect to 
issuers after the end of the 1-year period beginning on the date of the 
enactment of this Act.
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