Wednesday, October 13, 2021

SEC Expands Investment Company Proxy Disclosures

New Light on Funds' Securities Lending versus Proxy Voting

Author: David Schwartz

On September 29, 2021, the Securities and Exchange Commission issued a proposal to expand investment company disclosures of their proxy voting activities. If adopted, the rules would enhance the information mutual funds, exchange-traded funds, and other regulated investment companies are required to report on Form N-PX under the Investment Company Act. These expanded disclosures are intended to make proxy voting decisions made by investment company advisers more complete, accessible, and understandable to investors. 

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Tuesday, July 22, 2014

Should Pension Funds Police Corporate Governance?

Author: David Schwartz

It is often said that good corporate governance helps reduce a company’s investment risk, ensures the effective deployment of shareholder capital, and ultimately contributes to the long-term performance of public companies. . . On the other hand, the absence of a robust corporate governance infrastructure can lead to poor decisions resulting in bad outcomes for the company and its shareholders. 

SEC Commissioner Luis A. Aguilar has long been a champion of empowering shareholders to enforce sound corporate governance.  In a July 1, 2014 address before a meeting of the Latinos on Fast Track (LOFT) Investors Forum, Commissioner Aguilar once again addressed the role pension plans and other institutional investors play in ensuring that the companies they invest in make sound governance decisions.  Not only are pension funds obligated to vote their shares, according to Aguilar, but they should also work to make certain that shareholder voting rights are not restricted, and actively support measures that support shareholder rights and enhance their ability to communicate their views to management.
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Tuesday, April 10, 2012

Proxy Advisers' Influence on Say-on-Pay: Additional Data and Insights

Author: David Schwartz
Two new studies examine the influence proxy advisory services like ISS and Glass-Lewis have on the outcomes of proposals made to shareholders in firms' annual proxies, particularly say-on-pay votes, which became mandatory for most public companies in 2011.  Both studies look at the data behind the level of influence ISS and Glass-Lewis have on proxy voting outcomes, but they also look at the extent to which these voting recommendations may affect market reactions and change the way in which executive compensation packages are designed. These reports add valuable data and insights on shareholder voting and the related policy debate.
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