Recent Blog Posts

July 3, 2019

ISS Attempts to Discount Concerns on Proxy Advisory Firms with New Myth v. Fact Sheet

Institutional Shareholder Services (ISS) recently released a myth vs. fact summary aimed at downplaying concerns over the lack of regulatory oversight on the industry, following the recent announcement that the Securities and Exchange Commission (SEC) intends to propose a rule regulating proxy advisors this year. Here we explore the “facts” presented by ISS, many of ...

June 21, 2019

New Paper from Milken Institute Details Inherent Problems in Proxy Advisory Firms

Last week, nonpartisan think tank Milken Institute published a paper exploring the rise, impact, and implications of proxy advisors and how reforms could help improve the system.  Author Chester S. Spatt, a former chief economist of the Securities and Exchange Commission, writes that proxy advisory firms arose from a desire to address market failures in ...

June 20, 2019

ESG: The “Scarlet Letter” of Corporate America

This week, the American Enterprise Institute held a panel discussing environmental, social, and governance (ESG) investing as a means to drive social policy goals.  Securities and Exchange Commissioner Hester Pierce gave the opening remarks, beginning with a metaphor to the famous story of “The Scarlet Letter.” “Here too, we see labeling based on incomplete information, ...

June 12, 2019

Business Roundtable Submits Second Letter Calling for Proxy Reform

Drawing on examples from its 2019 survey of member companies, the new letter touches on two key reforms: modernization of the shareholder proposal process and ensuring accuracy and transparency of proxy advisory firm recommendations.

May 24, 2019

SEC Adds Updating Rules on Proxy Advisory Firms and Shareholder Proposals to Semi-Annual Agenda

Following months of debate, the Securities and Exchange Commission has officially added proxy advisory firms and shareholder proposal submission thresholds as topics to its agenda. Released May 22, the semi-annual agenda outlines 40 topics for agency action over the next year. While the agenda gives no indication what concrete actions the Commission will take, recent ...

May 20, 2019

United Kingdom Calls for Greater Transparency of Proxy Advisory Firms

This week, the UK Treasury published the Proxy Advisors (Shareholders’ Rights) Regulations 2019, a wide-range of measures addressing proxy advisors and their services, which will go into effect on June 10. The new regulations prove that the desire for proxy reform isn’t limited to one country or party, but instead is a global, bi-partisan aspiration ...

May 10, 2019

Institute for Pension Fund Integrity Event Underscores Importance of SEC Action on Proxy Advisors

Yesterday, the Institute for Pension Fund Integrity held a panel on proxy advisory firms, ESG investing and public pensions.  Opening the discussion was Representative Sean Duffy (R-WI) articulating his position on proxy advisory firms and the “racket” they bring to the process for every-day retail investors.

May 1, 2019

CalPERS Continues to Ignore its Fiduciary Duty to Pensioners

The California Public Employees’ Retirement System (CalPERS) is set to put a “laser-like focus” this proxy season on social issues like board diversity and executive pay. This is despite increasing concerns about CalPERS’ poor financial performance and pressure from the federal government to make sure public pension funds are making investments to increase returns. According ...

April 19, 2019

SEC Investor Advocate Ignores Key Criticisms of Proxy Advisors, Concerns of Retail Investors

Fleming delivered his remarks just a few days before a new study was published by the Spectrum Group which concluded, “retail shareholders are too often being used as a poster child by institutional intermediaries to support practices in shareholder voting that retail investors do not support.” The survey also found that 85 percent of investors support increased SEC oversight after being made aware of issues with proxy advisors.