In a strongly worded statement, Gary Retelny, President and CEO of ISS, testified before the House Committee on Financial Services about the Proxy Advisory Firm Reform Act. We previously covered the Act’s requirements here.
ISS believes that advisers themselves have become a proxy for the debate over the role of shareholders in the companies that they own, and that the proposed legislation heads in the wrong direction by turning away from an “investor-centric” federal regulatory regime to a “bureaucratic maze” that would ultimately allow corporations and their representatives to “pressure proxy advisers to back management positions.” According to ISS, proxy advisers have become an “outsized target in obsessive efforts by a small number of corporate managers and their representatives to discourage institutional investors from using their voice in the corporate governance debate.” Those individuals are trying to make it harder for investors to cast informed voting decisions by making it more expensive, cumbersome and time-consuming, so that if “information is equivalent to oxygen for proxy votes,” then “entrenched managers seek to cut off its supply.”
The firm annually covers more than 39,000 shareholder meetings in over 110 developed and emerging markets worldwide, and also implements custom voting policies for investors. Continue Reading