The Dodd-Frank Wall Street Reform and Consumer Protection Act significantly modifies the roles and responsibilities of companies, boards of directors, and shareholders, and requires companies to re-examine and refine their corporate governance practices, The Conference Board Governance Center said today.

“Regulators have increasingly intervened in the management and oversight of public companies embroiled in regulatory issues,” said R. William Ide, III, chairman of The Conference Board Governance Center Advisory Board, citing the consent decrees and settlement agreements that have led to adoption of governance reforms, increased board oversight responsibilities, and the appointment of federal monitors to oversee compliance with these and other requirements.

“The Dodd-Frank Act signals a sea change in the roles of boards, managements, shareholders, and regulators concerning the governance of all U.S. public companies,” said Paul DeNicola, director of The Conference Board Governance Center and Directors’ Institute.  “It necessitates that corporations—now more than ever—improve the ways in which they communicate with their institutional and retail shareholders.

“At the same time,” DeNicola added, “shareholders must recognize that with additional rights come additional responsibilities—and that a ‘one size fits all’ approach to corporate governance can not address the complexities and nuances faced by thousands of public companies.”

“The Governance Center is committed to providing a forum for senior executives and institutional investors to discuss, debate and advance best practices in a non-adversarial setting,” Ide said.  “Our research, writings, and educational programs provide the thought leadership to help companies, boards, and shareholders meet these and other challenges in ways that enhance corporate performance as well as public trust and market confidence.”

Among its governance provisions, the Dodd-Frank Act:

Gives shareholders a periodic advisory vote on executive compensation and golden parachutes.

Authorizes SEC adoption of “proxy access”—rules giving shareholders the ability to have their nominees included in the company proxy materials.

Prohibits brokers from exercising discretionary voting in director elections and on executive compensation matters.

Requires compensation committees to enhance independence criteria and requirements for independent consultants and advisors.

Imposes requirements for clawback policies for erroneously awarded compensation.

Imposes enhanced disclosures for compensation, company policies concerning employee and director hedging transactions and company decisions regarding separation of the CEO and Board chair roles.