Proxy Advisory Firms – SEC Guidance and an ISS Survey

The role of proxy advisory firms has been hotly and extensively debated over the years.  In August 2019 the SEC issued guidance that:

 Addressed the ability of investment advisers to establish a variety of different voting arrangements with their clients,

Discussed matters investment advisers should consider when they use the services of a proxy advisory firm,

Included an interpretation that proxy voting advice provided by proxy advisory firms generally constitutes a “solicitation” under the federal proxy rules, and

Provided related guidance about the application of the proxy antifraud rule to proxy voting advice.

The discussion about proxy advisory firms continues, and as part of this evolution ISS has released their annual Global Policy Survey.  For an interesting number of comments and perspectives on the survey, including discussion of ESG issues, you can read this post on the soundboard governance blog.  This blog is authored by Doug Chia, a Fellow at the Rutgers Center for Corporate Law and Governance.

Lastly, as a next step in this area, on November 5, 2019 the SEC proposed a rule to “improve accuracy and transparency of proxy voting advice”.

As always, your thoughts and comments are welcome!

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