Longtime proxy solicitor John Wilcox has submitted one of the most thoughtful comment on the SEC’s proxy roundtable issues. No one is more familiar with the issues raised by the current complexity of the system that provides information and voting mechanics.
The failures of the proxy system have traditionally been blamed on back-office complexities and inefficiencies. For example, the practice of stock lending is cited as one of the reasons for the proxy system’s inability to produce accurate voting positions. The loaned stock problem is in turn traced back to underlying systems for trading, clearance and settlement, whose features are in turn rooted in long ago decisions to immobilize securities in a central depository rather than dematerialize them. This lengthy chain of interlocking systemic issues has often discouraged short term fixes because of the perceived need to first address comprehensive reform of the underpinnings of Wall Street. Traceable shares and blockchain technology are the most frequently mentioned long-term solutions.