An Investor Perspective on the SEC’s Proxy Roundtables

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Ken Bertsch, Executive Director of the Council of Institutional Investors (CII), shares the investor perspective on the SEC's recent examination of the U.S. proxy system.

At the end of 2018, the Securities and Exchange Commission (SEC) hosted a roundtable examining the US proxy system, which included discussions about proxy voting mechanics, the shareholder proposal process, and the regulation of proxy advisors. In this episode, Ken Bertsch, Executive Director of the Council of Institutional Investors (CII), shares the investor perspective and makes predictions on what he believes will happen next.

“We’ve seen problems, which really came to the fore particularly with Proctor & Gambles’ proxy fight where no one really knows what the outcome was…That and some other situations are leading to real questions on how to make proxy mechanics better. I think, as people look at it, they’re going to go back a step to how securities are owned and transferred through clearance and settlement processes. And I think there’s a real potential for blockchain to solve this problem.

— Ken Bertsch, Executive Director, Council of Institutional Investors”

Bertsch also comments on the Corporate Governance Fairness Act and the suggested changes to the shareholder proposal process. Yet, his priry concern revolves around the regulation of proxy advisors–namely the threat to proxy firm independence, reporting timelines, and competition.

“[The threat to competition] really concerns me,” said Bertsch. “For our members, it means that if there’s a monopoly player, there’s going to be increased costs and lesser quality of research. So it actually could make things worse.”

In summary, Host TK Kerstetter asks Bertsch whether he believes the current proxy system has discouraged companies from going public.

For another perspective on the SEC roundtables, don’t miss our recent episode with Paul Atkins, former SEC Commissioner, discussing proxy voting mechanics and proxy advisor oversight.

Click here to view the full episode.


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