FOR IMMEDIATE RELEASE
Wednesday, December 15, 2021
Contact: Doug Walker at 202-618-6430 or dwalker@bettermarkets.org
WASHINGTON, D.C.—Stephen Hall, Better Markets’ Legal Director and Securities Specialist, released the following statement on the filing of a comment letter to the U.S. Securities and Exchange Commission in support of a proposed rule that will enhance transparency in the way investment companies cast their proxy votes.
“The right to vote on corporate leadership and policy choices is one of the most fundamental shareholder rights. Meaningful exercise of corporate suffrage can help ensure that boards and management are accountable to shareholders and other stakeholders. And the right to vote not only on the selection of board members but also on the adoption of major corporate policies can help ensure that shareholders have a voice in corporate strategies affecting the company itself, the communities in which they operate, and even the world at large.
“As of 2019, 53% of American households held stock in public companies, but only 15% actually held such stock themselves, which would allow them to directly participate in corporate elections. Instead, most American households hold stock indirectly through a variety funds, such as mutual funds, retirement accounts, and index funds. Because funds are the beneficial owners of the securities in question, it is the funds that have the right to vote proxies in shareholder elections.
“It is therefore essential that fund voting records are transparent and accessible to fund investors. The proposal issued by the SEC will serve those goals in two ways. It will improve upon existing rules by making sure that fund proxy voting information is more complete and usable. And it will implement a mandate in the Dodd-Frank Act requiring that institutional investment managers disclose how they vote proxies related to executive compensation matters. Ultimately, these rules will benefit the millions of Americans who rely on collective investments to achieve their financial goals but also care more and more about how companies affect all stakeholders.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies–including many in finance–to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
