The Council of Institutional Investors welcomed the Senate Committee on Banking, Housing and Urban Affairs' passage on Monday of the Restoring American Financial Stability Act, saying the legislation ”appropriately addresses the serious failures by corporate boards that contributed to the financial crisis.”
In a statement today, CII officials highlighted corporate governance provisions in the bill, including the requirement of a majority of votes by shareholders to elect directors and access to corporate proxy materials to enable shareholders to nominate directors.
“Majority voting and proxy access are critical tools investors need to hold directors accountable,” Ann Yerger, CII executive director, said in the statement. “Boards are the first line of defense against the risks and excesses that led to the crisis. These reforms will help shareowners exercise market discipline to make sure directors keep a careful eye on management and, if necessary, rein in reckless executives.”
CII also “lauds provisions in the committee bill that would strengthen the oversight and accountability of credit rating agencies, establish meaningful regulation of over-the-counter derivatives and bolster the resources and independence of the SEC,” the statement said.