The Securities and Exchange Commission is seeking comment on whether to stiffen rules for corporate elections to ensure that investors properly vote shares and firms giving ballot advice do not have conflicts of interest.
The SEC commissioners voted 5-0 to solicit comment on topics such as over-voting, in which too many shares are voted, and empty voting, which lets investors with limited economic interest in a company weigh in on corporate policies. The so-called concept release approved Wednesday at a meeting in Washington may guide rules the agency later proposes.
"The proxy is often the principal means for shareholders and public companies to communicate with one another, and for shareholders to weigh in on issues of importance," SEC Chairman Mary Schapiro said at the meeting. "The transmission of this communication must be — and must be perceived to be — timely, accurate, unbiased and fair."
The SEC said it is seeking comment on whether it should require investors to disclose economic stakes in companies that are not tied to stock. For instance, when a stockholder buys a put option to sell shares, the stock's voting rights are retained despite the owner's having hedged away much of his or her economic interest.
The agency's concept release also asks about the role of proxy-advisory firms, which advise pension funds on how to vote while selling consulting services to companies that want shareholders to back their board of director candidates and policies.
