Better Markets filed a comment letter urging the SEC to finalize and adopt a “universal proxy” rule as soon as possible.
Earlier this month, Better Markets filed a supplementary comment letter on a proposal by the SEC to establish a universal proxy requirement for most contested corporate elections. We support the creation of a universal proxy requirement, which would improve corporate governance and accountability, and we urge the SEC to finalize and adopt this proposal as soon as possible.
The SEC initially issued a proposal in 2016 that would have made progress on the universal proxy. While the proposal received support from Better Markets and many other investor advocates, it was never implemented.
Why it matters? The current system is irrational and unfair. It undermines one of the most important mechanisms available to investors for holding management accountable and charting the right course for the companies they own. As more and more investors push for action on ESG issues but often meet with resistance from incumbent management, proxy reform is becoming increasingly important to ensure shareholders have a full and fair opportunity to express their views and influence outcomes in corporate elections.
What we said. Now that the SEC is under new leadership, it has an opportunity to revisit, revise, and implement a “universal proxy” rule to ensure that shareholders that vote by proxy are able to exercise their full voting rights.
Bottom line. Given that the SEC exists to protect investors, not incumbent management, the SEC needs to begin the process of empowering shareholders. We urge the SEC to move quickly to correct this gap in our current corporate governance framework and implement the proposal, with some adjustments, immediately.
Read more in our press release.