I 
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 compensa-
tion policies, to require non-binding shareholder votes on executive com-
pensation, 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 re-
quirements 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 Representa-
tives 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’’. 
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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 fol-
lowing new section: 
‘‘SEC. 10B. INDEPENDENCE OF CHAIRMAN OF THE BOARD. 
‘‘(a) INDEPENDENCE REQUIREMENT.—The chair-
man of the board of directors of an issuer shall be inde-
pendent. 
‘‘(b) PROHIBITION ON SERVICE AS EXECUTIVE OFFI-
CER.—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 mem-
ber of the risk management committee of an issuer 
shall be independent. 
‘‘(2) DUTIES.—The risk management com-
mittee of an issuer shall periodically review the risk 
management policies of the issuer. 
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‘‘(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 Ex-
change 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) es-
tablished 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 re-
spect 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: 
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‘‘SEC. 10D. COMPENSATION COMMITTEE. 
‘‘(a) INDEPENDENCE REQUIRED.—Each member of 
the compensation committee of an issuer shall be inde-
pendent. 
‘‘(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 Ex-
change 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) es-
tablished 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 re-
spect to an issuer, the entire board of directors 
of the issuer.’’. 
SEC. 5. SHAREHOLDER VOTE ON EXECUTIVE COMPENSA-
TION. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 14 the fol-
lowing new section: 
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‘‘SEC. 14A. ANNUAL SHAREHOLDER APPROVAL OF EXECU-
TIVE 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 Com-
mission require compensation disclosure of the share-
holders occurring after the end of the 1-year period begin-
ning on the date of enactment of this subsection, shall in-
clude a separate resolution subject to shareholder vote to 
approve the compensation of executives as disclosed pursu-
ant to the compensation disclosure rules of the Commis-
sion (which disclosure shall include the compensation dis-
cussion and analysis, the compensation tables, and any re-
lated 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 cur-
rent 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 share-
holders to make proposals for inclusion in such 
proxy materials related to executive compensation.’’. 
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SEC. 6. STUDY ON DIRECTOR CERTIFICATION. 
(a) STUDY REQUIRED.—The Securities and Ex-
change Commission shall carry out a study on the feasi-
bility of requiring, and the logistics of implementing, a cer-
tification process under which an individual seeking to be-
come a member of the board of directors of an issuer 
would have to first be certified by the Securities and Ex-
change 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 begin-
ning on the date of the enactment of this Act, the Securi-
ties and Exchange Commission shall— 
(1) issue regulations to carry out the amend-
ments made by this Act; and 
(2) by rule, direct the national securities ex-
changes and national securities associations to pro-
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