Proxy Governance is considering a “radical change” to restructure the corporate governance and proxy-voting advisory firm into a not-for-profit entity called the Proxy Governance Institute, according to Michael J. Ryan Jr., president and COO.
Proxy Governance is a unit of FOLIOfn. Depending on the restructuring, the Proxy Governance Institute could be owned by FOLIOfn, or separated into an independent entity, he said.
Mr. Ryan said he has been talking with officials at pension funds, foundations, publicly traded companies and others about the plan.
How soon Proxy Governance would undertake the change depends on “how much interest there is in the concept and support for it,” Mr. Ryan said.
One question is “whether a new approach and business model can be developed by the private sector to better align the societal need with the business opportunity,” according to Proxy Governance's outline of its transformation idea.
The “current for-profit business model is a barrier to serving the full range of investors, including individual investors,” according to the outline. The outline concluded that “a superior way” would be “to redeploy PG's services in a new business model supported by users fees and supplemented by third-party sponsorship.”
A statement from Proxy Governance said: “The underlying premise of this new approach is that corporate governance and … proxy voting are matters of public policy with important societal implications that transcend any one company, shareholder or group of shareholders.”
“We believe strongly that the current system has outlived its useful life and is no longer up to the task of serving investors, issuers and the broader public,” the statement said.
