Wall Street Journal Editorial Targets Highlights the Veto Power of Proxy Advisory Firms
August 11, 2018
Using the opposition to a recent merger, which was then called off, a Wall Street Journal Editorial examines the influence of the two leading proxy advisory firms, noting that "Glass Lewis and ISS control 97% of the advisory market, which encourages herd voting among investors." The editorial states that proxy advisory firms "don’t have to demonstrate that their recommendations are in the best interest of shareholders, which can cause conflicts of interest." For support it states that the Alberta Investment Management Corporation, which partly owns Glass Lewis, also was a top 10 shareholder of one of the merger parties. The article concludes by noting that corporate management is responsible to shareholders, but asks "who will hold the proxy advisory firms accountable?" SEC ChairJay Clayton has announced a staff round table that will look at proxy advisory firm issues, and the Center will submit comments in the process.