Forum Home Page [see Broadridge note below]

 The Shareholder ForumTM`

Fair Investor Access

See related case examples of

Dell Inc.

investor rights to intrinsic value realization

and

Walgreen Co.

stock buyback policies

"Fair Access" Home Page

"Fair Access" Program Reference

For graphs of specific company and related industry returns, see

Returns on Corporate Capital

See also 2011-2019 analyses of

Shareholder Support Rankings

 

 

 

Forum distribution:

SEC Commissioner supports growing concerns about concentrated control of companies by large fund managers

 

For recently noted academic and professional observations relating to the regulator's views reported below, see

 

Source: Reuters, December 6, 2018 article


 

BUSINESS NEWS     DECEMBER 6, 2018 / 11:33 AM

 

U.S. securities regulator should demand more voting disclosure from fund managers: official

 

Katanga Johnson

 


WASHINGTON (Reuters) - The U.S. securities regulator should consider imposing stricter disclosure requirements on institutional fund managers relating to how they vote in corporate elections, a Securities and Exchange Commission (SEC) official said on Thursday.

FILE PHOTO: A general exterior view of the U.S. Securities and Exchange Commission (SEC) headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst/File Photo

The growing power of passive index funds in corporate elections posed governance and investor-protection concerns, with most investors unaware of how fund managers vote on their behalf, SEC Commissioner Robert Jackson said at an inter-regulatory audience of the Federal Trade Commission.

“There are serious investor protection and corporate governance issues that are implicated by the common ownership of stocks by a handful of institutional index fund managers,” Jackson said at the gathering at New York University’s School of Law.

“Each year, institutional investors cast votes in corporate elections on behalf of more than 100 million American families, wielding significant power in the future of our companies and communities,” he added.

Jackson, a Democratic commissioner who was sworn in at the SEC in January, said investors did not get enough useable information about how fund managers vote on matters regarding their money and consequently, they cannot hold those managers accountable for how they vote in those elections.

“It’s time for that to change.”

Jackson’s comments are likely to intensify a broader debate over corporate democracy in the United States which has heated up in recent months.

Industry groups are pushing the SEC to overhaul its rules on how shareholders are able to vote on special issues like climate change and diversity, while investors worry any changes will undermine their ability to hold company managers to account.

Citing recent academic research, Jackson, a professor who is on public service leave from the New York University’s School of Law, said institutional investor voting patterns fall into three distinct camps and investors ought to be aware of the distinct biases when deciding which funds to park their money with.

Jackson has become a persistent voice for investor protection issues at the regulator, pushing for change on other issues such as voting rights and stock exchange fees and competition.

(The story refiles to match headline to lead paragraph)
 

Reporting by Katanga Johnson; Editing by Bernadette Baum

Our Standards:The Thomson Reuters Trust Principles.

 

© 2018 Reuters.

 

This Forum program is open, free of charge, to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

This Forum program was initiated to address issues and objectives defined by participants in the 2010 "E-Meetings" program relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to access@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.