Council of Institutional Investors endorsed key provisions in the discussion draft of the Senate's Restoring American Financial Stability Act.
A letter sent today to Sen. Christopher J. Dodd, D-Conn., chairman of the Senate Banking, Housing, and Urban Affairs Committee, said: “The key corporate governance improvements included in your discussion draft would go a long way toward more meaningful oversight by public companies' owners — their investors.” The letter was written by Jeff Mahoney, CII general counsel.
“Such measures would address, at least in part, many of the problems that led to the current (financial) crisis. More importantly, they would empower shareowners to anticipate and potentially address future risks.”
Corporate governance provisions in the draft include giving shareholders access to corporate proxy materials to nominate directors and requiring majority voting for directors in uncontested elections to make board members “more accountable to the company's owners,” Mr. Mahoney wrote.
In addition, Mr. Mahoney said the council supports the draft's effort to bring more accountability to credit rating agencies, which he called “financial ‘gatekeepers' to the capital markets.” The “rating agencies were at the heart of the global financial crisis,” Mr. Mahoney wrote.
In the letter, also sent to Sen. Richard C. Shelby, R-Ala., ranking member of the committee, Mr. Mahoney said the council supports the draft bill's call for “regulation and transparency” of over-the-counter derivatives.
CII is an association of public, union and corporate pension funds whose combined assets exceed $3 trillion.