Last Wednesday, the SEC announced its decision to review the proxy voting system. This system, referred to by the SEC as “proxy plumbing,” includes shareholder voting, communication, and vote tabulation. The SEC is addressing current concerns in a concept release which will solicit comment from the investor and corporate community for 90 days after publication in the Federal Register. The concept release is intended to generate solutions with regards to three areas:
- Enhancing the accuracy, transparency, and efficiency of the voting process
- Determining whether the rules should be revised to improve shareholder communications and increase their participation
- Determining whether the voting power is aligned with economic interests and whether the SEC’s disclosure requirements provide investors with sufficient information.
The SEC’s proposed solutions seek to improve vote accuracy and communication. It is unlikely that any changes to come out of this effort will be adopted until next year. NACD supports any regulations that bring clarity and accountability to the shareholder voting process. For more information visit NACD’s Legislative & Regulatory Update on NACDonline.org.