The ‘Corporate Governance Reform and Transparency Act of 2016’ would improve the transparency and accountability of the proxy advisory process
In testimony submitted to the House Financial Services Committee, John Hayes, Chairman, President and Chief Executive Officer of Ball Corporation, and Chair of the Business Roundtable Corporate Governance Committee, writes:
“Business Roundtable CEOs are concerned ISS and Glass Lewis [leading proxy advisory firms that provide proxy voting recommendations to institutional investors, such as pension funds] fail to avoid conflicts of interest, frequently promulgate factually inaccurate information and are neither transparent in their business dealings nor publicly accountable for the recommendations they provide. …“Business Roundtable strongly supports the ‘Proxy Advisory Firm Reform Act of 2016’ [introduced by Rep. Sean Duffy]. It would require proxy advisory firms to register with the SEC and annually provide the agency with material disclosures, including:
- The procedures and methodologies that the applicant uses in advising its clients;
- The organizational structure of the applicant;
- Whether the applicant has a code of ethics; and
- Any potential or actual conflict of interest related to the ownership structure of the applicant.”
Read the full statement here and click here to learn more about the Business Roundtable positions on corporate governance.
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