Facing a growing chorus of concerns about proxy advisory services, the industry's major players on Thursday defended the advice they give institutional investors on shareholder voting, telling the Securities and Exchange Commission that their consulting is critical and ethical.
Participating in a roundtable discussion at the SEC in Washington, D.C., the heads of leading proxy advisory firms Glass, Lewis & Co. and Institutional Shareholder Services Inc. (ISS) emphasized the steps they take to bring transparency to their services and avoid conflicts of interest, two matters that have made some companies uneasy. Glass Lewis chief executive officer Katherine Rabin and ISS president Gary Retelny noted that their firms make frequent public disclosures about their advisory activities and work in the best interest of their clients.
NASDAQ OMX Group Inc. general counsel Edward Knight in October petitioned the SEC to address what he said is a "lack of transparency and conflicts inherent" in the work of proxy advisory firms, which count pensions, mutual funds and other institutional investors among their clients. These firms are able to "exert outsized influence from the shadows," he said.