The Value of Shareholder Voting

Recent debates have sometimes obscured the value of shareholder voting, which the Council of Institutional Investors (CII) regards as a key element in the legitimacy and functioning of the corporate governance system in the United States and elsewhere.

A factor in confusion on this may be overstatement of supposed claims made by institutional investors generally for “shareholder democracy.” In a current paper, for example, Bernard Sharfman writes that “Shareholder voting provides a means by which shareholders can participate in corporate decision making.”[1] However, he goes on to say, “very few public company decisions involve this decision-making mechanism.” Well, one … Read more

Why the SEC Proposal to Regulate Proxy Advisors Is Flawed

[Editor’s Note: This and the piece that immediately follows offer a point/counterpoint on the SEC’s proxy advisor proposal.] The Council of Institutional Investors opposes the SEC’s proposal to create a new regulatory structure for proxy advisory firms.[1] The proposed rules would codify August 2019 guidance from the commission (issued with no public comment or economic analysis) that proxy advice is “solicitation” under securities law, and then create new conditions for exemptions from solicitation rules necessary to do business as a proxy advisor. CII has provided extensive feedback in response to the SEC’s request for comments on the … Read more