"If there is a better idea out there, we want to know about it," Donaldson told a legal audience in Washington on Friday, according to a copy of his prepared remarks.
He referred to the SEC approach as "measured" and a "middle ground" that would limit challenges to companies where they were truly needed.
The middle ground has proven to be a relatively narrow terrain, with vehement detractors on all sides.
Many shareholder activists, including large pension funds, labor unions and state treasurers, complain that the SEC plan doesn't go far enough. They say it sets excessively high standards to trigger a vote and disenfranchises smaller owners. Another complaint is that it could take a year or more to reach a vote, allowing grievances to go unanswered.
"It's ridiculous that corporations feel so threatened by this when it's such a modest proposal," said Tracey Rembert, coordinator of the Shareholder Action Network.
For their part, corporate executives warn that it would unleash a torrent of disruptive challenges, often by investors whose goals may be far more narrow than the mass of shareholders. The supposed rash of contests, they contend, would eat up time from executives -- time better spent on running companies in the best interests of the majority of investors.
"We think it would hit hundreds and hundreds of companies, including those with the highest standards of corporate governance," said John J. Castellani, president of the Business Roundtable, which is spearheading opposition to the plan and represents the corporate establishment.
In response to the extraordinary public reaction, the SEC in February took the unusual step of inviting more comments and scheduled a special round table for Wednesday.
Two of the SEC's three Republicans remain wary of the plan. The two Democrats support it. Donaldson, the GOP chairman, could cast the tie-breaking vote in favor but is struggling behind the scenes to design a final rule that can win over his fellow Republicans.
Advocates once expected to have the rule in place for the season of annual meetings which has just begun and runs into June. They are still hoping to approve a rule soon after the March round table.
"This is in the shareholders' interest but also in the nation's interest," said SEC Commissioner Harvey J. Goldschmid, a Democratic backer.
