Standards

Case to eliminate broker votes

Richard Moore, North Carolina state treasurer, has called on the US Securities and Exchange Commission to eliminate broker votes in director elections. Such votes are cast by brokers on behalf of uninstructed client shares, and are often automatically cast in favour of the board.

Moore said: “As shareowners, we continue to fight for a real voice and for strong governance measures that support long-term value. But these broker votes are rubber stamps for management, thwarting real change and preventing shareholders’ voices from being heard”.

Broker votes were recently the cause of controversy at CVS/Caremark, where CtW Investment Group alleged Roger Headrick only achieved re-election to the board as a result of these “phantom votes”.

July 2007