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Proxy war

ISS, CII launch website in opposition to House proxy agency bill

Institutional Shareholders Services and the Council of Institutional Investors have created a website in opposition of a bill being floated in Congress that they say would alter the nation's proxy advisory landscape.

The website, Protect the Voice of Shareholders, was launched Oct. 2 and "corrects the inaccurate rhetoric pushed by H.R. 4015 proponents," according to an ISS and CII news release.

H.R. 4015, the Corporate Governance Reform and Transparency Act of 2017, passed the House of Representatives late last year and is now being considered in the Senate. Under the bill, proxy firms would have to register with the Securities and Exchange Commission, disclose potential conflicts of interest and codes of ethics, and make public their methodologies for formulating proxy recommendations and analyses.

ISS and CII are opposed to the bill.

"While proponents of H.R. 4015 have created the illusion of problems in proxy advising that need fixing by Congress, what they really seek to do is minimize the voice of shareholders and investors on matters like CEO pay," said Ken Bertsch, executive director of CII, in the news release. "H.R. 4015 would require proxy advisory firms to share their research reports and voting recommendations with the companies that are the subject of their reports and recommendations before they share them with their paying customers, institutional investors. Giving companies the right to review proxy advisors' work before it goes to actual clients is unprecedented interference in the commercial marketplace."

The new website prompts visitors to contact their senators and tell them to oppose H.R. 4015. It also touts a Morning Consult poll conducted in August that found 63% of voters are against the proposed legislation.