ACCF Applauds SEC Call for Roundtable on the Proxy Process

WASHINGTON, DC – The American Council for Capital Formation applauds the recent decision by the Securities and Exchange Commission (SEC) to begin the process of looking into the shareholder proxy process.

“The SEC’s rules governing the proxy process are at the center of investor participation in the corporate governance of public companies. The decision to hold a roundtable to gather stakeholder input is an strong signal that the commission is serious about ensuring the concerns of investors are appropriately represented,” said Tim Doyle, General Counsel and Vice President of Policy at the American Council for Capital Formation.

The SEC last week announced its staff will host a roundtable on Nov. 15 to gather investor, issuer, and other market participant views about the proxy process and rules.

“The SEC’s upcoming roundtable on the proxy process and the role of proxy advisory firms, coupled with the recent revocation of two staff guidance letters, demonstrates the importance of these issues to the Trump administration and its continued commitment to regulatory reform,” Doyle said. “This renewed attention is an excellent first step toward ensuring that the concerns of investors are appropriately represented in the shareholder proposal process.”

The ACCF encourages federal regulators take steps to ensure greater transparency and accountability to proxy advisory firms, modernize corporate disclosures, reform the shareholder proposal system and address concerns over special-interest activism.

“There is a growing body of evidence that a conflict of interest exists within proxy advisory firms, which often provide ratings and consulting services to the same client simultaneously. When coupled with the inability of corporate leaders to have input into the recommendations of proxy advisory firms, even in cases where the information is incorrect or misleading, and the lack of transparency in the analysis process, the role of proxy advisors and those who rely on them deserves a closer look to ensure that shareholders benefit from changes sought through the shareholder proposal process.”

Tim Doyle is author of the ACCF report: “The Conflicted Role of Proxy Advisors looking at the unchecked influence of proxy advisors and the need for greater oversight. Read his recent opinion piece in Real Clear Policy.

The American Council for Capital Formation Center for Policy Research is a nonprofit, nonpartisan economic policy organization dedicated to the advocacy of pro-growth tax, energy, environmental, regulatory, trade and economic policies that encourage saving and investment.