Washington, D.C. – American Consumer and Investor Institute CEO Blaine Luetkemeyer released the following statement today on the House Financial Services Committee hearing with U.S. Securities and Exchange Commission (SEC) Chairman Paul Atkins. At the hearing, HFSC Chairman French Hill and Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence Chairman Bryan Steil addressed the importance of increasing transparency and strengthening regulatory oversight of the proxy advisor industry.
“Every American who owns an individual stock, has a retirement plan, or worked hard to earn a pension should know how the foreign-owned duopoly of ISS and Glass Lewis impacts them and their financial security. Thanks to the leadership of House Financial Services Committee Chairman French Hill, Subcommittee Chairman Bryan Steil, and SEC Chairman Paul Atkins, the industry is finally receiving the scrutiny it deserves,” said American Consumer and Investor Institute CEO Blaine Luetkemeyer. “ACII is proud to support efforts to increase transparency, accountability, and oversight of the proxy advisor industry to ensure the interests of American investors are prioritized and protected.”
Luetkemeyer, who previously served on the House Financial Services Committee, recently co-authored an op-ed in American Banker with his former committee colleague, Congressman William Lacy Clay Jr., calling on Congress to give the SEC clear statutory authority to regulate proxy advisors. Read the op-ed HERE.
Following are key excerpts from the hearing:
Hill, Atkins on ‘Weaponized’ Corporate Governance
Chairman Atkins: “We are definitely looking at the entire ecosystem of corporate governance and shareholder proposals. Part of the problem with these advisory firms, I think, is that they are more a symptom of the underlying issue: the weaponization of shareholder proposals. We are actively addressing it, as part of our three-point program to make IPOs great again.”
Steil, Atkins on Proxy Advisor Duopoly and Conflicts of Interest
Congressman Steil: “I also think that there’s a real conflict of interest between the ability to provide consulting services on one side of a so-called Chinese wall and then to be able to provide advisory on the other side. Do you think that those potential or real conflicts of interest should be disclosed for the capital markets to operate efficiently?”
Chairman Atkins: “Well, they not only should be disclosed, but obviously they need to be addressed. And so, I think that’s an issue that we definitely are concerned about.”