Critics charge that the firms have grown too powerful as large investors like pension funds — which often own a large amount of stock in a particular company and can significantly sway a decision one way or the other — follow their advice.
“The current environment creates an undue reliance on proxy advisory firms that policymakers did not anticipate as they worked to address the evolving shareholder voting landscape,” Daniel Gallagher, a prior SEC commissioner appointed by former-President Barack Obama in 2011, wrote in prepared testimony. And without congressional attention to the issue, “the outsized role of proxy advisory firms will only continue to grow.”
‘Enforcement 40’ for 2020
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