In Reviewing Proxy System, SEC Would Have To Resolve Advisory Firms' Role
Professor Joseph Grundfest is quoted in this story on the Securities and Exchange Commission's study on proxy services and their influence on institutional investors and public corporations. The Bureau of National Affairs reports:
One of the major battles shaping up in the Securities and Exchange Commission's review of the current proxy voting infrastructure is the role played by proxy advisory firms and the extent to which they should be regulated.
Comments submitted in response to the agency's concept release on the proxy system show that there is a deep divide between how institutional investors and public companies perceive the part played by such firms.
In the concept release, the SEC asked if proxy services wield too much influence over shareholder voting, and whether oversight of the firms is necessary for investor protection (42 SRLR 1362, 7/19/10).
In an accompanying release, Stanford University law professor Joseph Grundfest, co-director of the Rock Center and a former SEC commissioner, said there is not a clear picture as to when empty voting arises or its actual implications. “The study's findings raise important questions about the very foundations on which corporate governance is based,” he said.