NIRI has revealed it supports some of the criticisms made by James Copland from the Washington-based conservative think tank the Manhattan Institute for Policy Research in his evidence to a Senate Committee last week.
Copland blamed an increased focus on ESG, regulations, special interest groups and proxy firms for having a ‘negative’ impact on shareholder value.
Ted Allen, vice president of strategic communications at NIRI, tells IR Magazine: ‘James Copland makes a number of interesting observations in his Senate testimony that are consistent with the experiences that many IR professionals have when engaging with investors on social policy issues.
‘We agree with his observation that a small group of social activists with relatively small holdings are exercising significant influence over the voting guidelines and recommendations of the two major proxy advisory firms and also are increasingly influencing the voting practices of many institutional investors.’
Allen also highlights that the SEC could be doing more in this regard. ‘We believe that the SEC can address some of these concerns by modernizing the shareholder proposal rules by increasing the resubmission thresholds to weed out resolutions that don’t receive broad support.
‘NIRI also believes that the SEC should exercise closer oversight over proxy advisory firms to enhance report accuracy and to improve disclosure of conflicts of interest so that investors will know whether a resolution proponent is a client of the proxy advisory firm.
‘NIRI supports the recent letter by Nasdaq and 318 public companies that calls for closer SEC oversight of proxy advisors and reform of the shareholder proposal rules.’