The SEC Is Right to Demand Accountability From Proxy Advisors

One of the most significant – and least discussed – processes underway in Washington at present is the move by the Securities and Exchange Commission (SEC) to reform the rules governing the conduct of proxy advisory firms.

These firms play an important role in providing institutional investors with data, research, analysis and--most importantly--recommendations on how to vote on management and shareholder proposals at the annual meetings of public companies. This gives proxy advisory firms a significant role in influencing many aspects of corporate governance.