Proxy advisory firms may have limited influence over proxy voting because most large institutional investors that control the majority of proxy votes do independent research, according to Government Accountability Office report released today.
The fact that large institutional investors cast the great majority of proxy votes made by institutional investors and reportedly place relatively less emphasis on advisory firm research and recommendations could serve to limit the firms overall influence on proxy votes, the report said.
The report also said the SEC conducts examinations of SEC-registered proxy advisory firms and has not identified any major violations.
The report was requested by several lawmakers, including Rep. Spencer Bachus, R-Ala., the ranking minority member on the House Financial Services Committee. The GAO report said the lawmakers had asked for an overview of proxy advisory firms in the interests of helping to ensure the integrity of proxy voting.