Mary Schapiro, chairman of the Securities and Exchange Commission is a step closer to straightening out America’s proxy plumbing. In a speech made at the Stanford University Law School Directors College on June 20th, Schapiro outlined the Commission’s current thinking.
“the Commission will soon consider publishing a concept release soliciting detailed ideas about how to modernize the voting infrastructure through which, I am told, over 600 billion shares are voted every year at more than 10,000 public company shareholder meetings.
For example, we’d like to know if proxy advisory firms should be subject to greater Commission oversight and if so, what should that oversight look like? Proxy advisers play an increasingly important role, particularly with regard to investors who may not have the specialized expertise to weigh in on particular questions. Should there be checks on the accuracy of the information provided by proxy advisers? Are advisers who provide services to both corporations and investors managing and disclosing the resulting conflicts of interest appropriately? Are SROs appropriately overseeing proxy distribution fees? And, in an area very near to my heart, how can we increase voter participation by retail investors?
These are only a sampling of the questions that we cannot answer alone. Just as the back-and-forth between boards and shareholders yields better decisions, the back-and-forth between regulators and stakeholders improves the process, as well. I hope that you and your companies actively participate in this concept release, because we really do need to hear from you.”