In Washington, a dispute over the influential companies that offer shareholders advice on corporate governance issues is intensifying.
Some of the biggest business organisations in the nation are contesting the Securities and Exchange Commission’s decision last month to lift restrictions put in place during the Trump administration on the proxy advisory companies that advise investors on how to vote on contentious proposals presented at annual corporate meetings.
According to SEC Chair Gary Gensler, the Wall Street regulator’s unusual about-face was motivated by a growing group of investors who were concerned that the 2020 reform would allow executives to exert more control over the independent advice they were paying the proxy advisers for.
The U.S. Chamber of Commerce and other industry groups are preparing a full-throttle legal effort to reinstall the rules that not too long ago CEOs had celebrated as a victory, but the decision has opened yet another chapter in a protracted saga over the proxy system. A Republican legislator is drafting laws to control the companies.
Jim Angel, a finance professor at Georgetown University, said: “It’s simply a war of who’s watching the watchers.”
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