The SEC’s own Investor-as-Owner Subcommittee of the SEC Investor Advisory Committee does not approve of the proposed rule on proxy advisory firms and proxy proposals. An excerpt:

The IAC has long urged the Commission to address a variety of problems in the proxy system, and there are valuable elements in the PA/SP actions, such as improved disclosure on proxy advisor conflicts of interest.2 While we appreciate the Commission’s effort to seek a productive balance in a changing environment for corporate governance and shareholder engagement, we are concerned the PA/SP actions may collectively shift the balance in a manner that does not serve investor interests.

We believe the PA/SP actions as currently framed will not reliably achieve their stated goals, because the system is in need of more basic reform, and because it is necessary to establish a link between the actions and clearly identified problems. Finally, we believe that reasonable alternatives deserve consideration.

IAC comment