This past Thursday, the Investor Advisory Committee (IAC) of the Securities and Exchange Commission (SEC) reviewed and discussed the written proposal from the Investor-as-Owner Subcommittee (Subcommittee) for a recommendation to the Commission on modifying and improving the structure of the proxy process, commonly referred to as “proxy plumbing.” The discussion was a continuation of the discussion the IAC previously held at its September 2018 public meeting. That meeting preceded the SEC Roundtable on the Proxy Process in November 2018, which we previously discussed.
At the July 25, 2019 meeting, the Subcommittee made the following four recommendations on proxy plumbing:
- The SEC should require end-to-end vote confirmations to end-users of the proxy system, potentially commencing with a pilot involving the largest companies;
- The SEC should require all involved in the system to cooperate in reconciling vote-related information, on a regular schedule, including outside specific votes, to provide a basis for continuously uncovering and remediating flaws in the basic “plumbing” of the system;
- The SEC should conduct studies on (a) investor views on anonymity and (b) share lending, and
- The SEC should adopt its proposed “universal proxy” rule, with the modest changes that would be needed to address objections that have been raised to that proposal.