November 05, 2019


WASHINGTON, D.C. - The U.S. Chamber commends the SEC on today’s long overdue proposed regulatory action on proxy advisory firm and shareholder reforms. These proposals will both ensure investors will have access to transparent and unconflicted proxy advice as well as improve the proxy submission process that has not been updated in over 50 years.

The U.S. Chamber has long advocated for policies that promote effective communication between public companies and their shareholders, and believe strong corporate governance is critical to promote the long-term performance of public companies and to enhance shareholder value.

“The proxy advisory firm industry is a duopoly, with only two companies controlling 97% of the market. They play a critical role in the system and yet they have been allowed to operate with material undisclosed conflicts of interest and opaquely develop one-size-fits all voting recommendations.” said U.S. Chamber Center for Capital Markets Competitiveness Executive Vice President Tom Quaadman. “It is no surprise that the rise of advisory firms coincides with the steep decline in the number of public companies in the United States. Today’s action advances the SEC’s mission of investor protection as well as promoting competition and capital formation.”

Addressing the SEC’s action on shareholder proposal reform Quaadman said: “The Eisenhower-era rules on shareholder proposals are no longer sufficient in the 21st century. The current structure allows special interest activists to push narrow agendas even when shareholders have repeatedly rejected those proposals. These new SEC reforms will help improve communication between investors and businesses. Ultimately, these changes will allow the will of the majority to prevail.”

Since the 1990s the U.S. has seen a steady decline in companies going and staying public. Right now, we have half as many public companies in the U.S. as we had twenty years ago. In 2018 the U.S. Chamber released two reports, EXPANDING THE ON-RAMP: Recommendations to Help More Companies Go and Stay Public and Raising The SEC’s Resubmission Thresholds: Zombie Proposals, that provided recommendations to reverse this trend and both SEC proposals today go a long way to achieving that.

Quaadman added, “Today’s actions by the SEC on proxy advisory firm and shareholder proposal reforms are necessary for investors to receive better information and to have their voices heard. These proposed rules will help investors make informed decisions and ensure they benefit by being able to invest in the fastest growing companies.”

The U.S. Chamber looks forward to working with its members and the SEC during the comment period.