Today, National Association of Manufacturers (NAM) President and CEO Jay Timmons and U.S. Chamber of Commerce President and CEO Tom Donohue published a joint open letter calling for reforms to the proxy advisory system.
The letter, published in The Wall Street Journal, The Washington Post, The Hill and Politico, outlines the impact that proxy advisory firms have on publicly traded businesses and Main Street investors. Proxy advisory firms make recommendations and often automatically cast votes on behalf of intermediaries that hold shares of stock for American workers and retirees. These votes represent Main Street investors’ voice in corporate elections and on important company decisions. But proxy advisory firms operate without transparency and can provide advice that contains errors and is tainted by conflicts of interest.
The letter calls for reform in advance of tomorrow’s Securities and Exchange Commission (SEC) roundtable on the proxy process. The two organizations also recently launched a major initiative to educate Main Street investors in 401(k)s and pension plans on the dangers proxy advisory firms pose to their retirement savings.
This joint effort follows the NAM’s submission of technical comments to the SEC advocating oversight of proxy advisory firms.
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