Congressional Testimony : Shareholder Proposals, Index Fund Voting and the Need for Proxy Advisor Reform

This Congressional testimony, requested by the House Financial Services Committee, reviews the history and current state of the federal shareholder proposal rule and how it has been seized by special interests to push agendas at odds with shareholder interests; ponders the conundrum that passive investment funds deign to actively vote shares with limited company-specific knowledge; and laments how proxy advisors, intended to support such passive voting, lack incentives to promote accurate and reliable information. Congress should restore the legitimacy of the shareholder proposal process, revisit and/or eliminate voting by index funds, and regulate and/or eliminate the need for the proxy advisor industry