We’ve noted that the passage of the Dodd-Frank financial reform bill left much still to be determined by regulators in later rulemaking. The SEC’s ruling Wednesday on the “proxy access rule” is a perfect example.

Fought over during financial regulation negotiations, it was ultimately left out — the bill instead gave authority to the SEC to make rules, and yesterday, the SEC voted on party lines, 3-2, to give shareholders more power to nominate directors to the corporate boards of publicly traded companies. 

The new rule “requires companies to include the names of all board nominees, even those not backed by the company, directly on the standard corporate ballots [or the proxy] distributed before shareholder annual meetings,” according to The Wall Street Journal. That’s far easier on shareholders than the current process, which the Journal describes:

Currently, shareholders who want to oust board members must foot the bill for mailing separate ballots, as well as wage a separate campaign to woo shareholder support. Both are too costly and time-consuming for most. Now, the targeted companies will essentially be footing the bill for the dissidents, including them in the official proxy materials. The new rule will be in place in time for the 2011 annual meeting season next spring.

After the passage of the financial reform bill, we spoke with former SEC Chairman Arthur Levitt, who said that in his opinion, shareholder access to the proxy was the most important omission from the bill, because “ as the system has been structured, shareholders have no say in the management of the company except in very, very unusual circumstances.”

Under the new rule, shareholders will be eligible to nominate a candidate only if they hold at least 3 percent of the company’s shares and have had them for at least three years. (The number is significant because during financial regulation negotiations, one of the proposals had been a 5 percent threshold, which some believed would negate the point of the rule by limiting the additional influence only to larger investors.)

While the SEC’s new action is being hailed by investor groups as an overdue victory, the Financial Times noted that business groups are already lining up to use “every method available” to fight the rule.

The U.S. Chamber of Commerce — the industry group that earlier tried to mobilize grassroots opposition to the rule among small business owners for whom the rule would not directly apply — issued a press release that criticized the SEC and called the new rule a “giant step backwards.” It argued that proxy access would give “special interests the ability to hold the board hostage on narrow issues at the expense of other shareholders.”