This week, the Securities and Exchange Commission (SEC) unveiled two rule proposals to provide oversight of proxy advisory firms and make targeted reforms to the shareholder proposal process. The National Association of Manufacturers has led the effort to bring these reforms to the proxy process, which are intended to make the proxy process more responsible to Main Street investors and more reflective of business realities.
Proxy advisory firms make voting recommendations to the asset managers who oversee Americans’ retirement savings. As a result, the firms have enormous influence over the policies of publicly traded companies, impacting the direction of businesses they have no stake in as well as the life savings of millions of Main Street investors. Unfortunately, a lack of oversight means proxy advisory firms often operate with undisclosed conflicts of interest and inadequate transparency, implement one-size-fits-all decision-making and make errors that impose significant costs and damaging policies on manufacturers and workers.
The SEC’s first proposed rule would institute reforms to the process by which proxy firms make recommendations and engage with issuers and investors, including requirements that the firms disclose their conflicts of interest and allow companies to highlight potential errors and misleading methodologies.
“This is a significant victory for manufacturers, workers and middle-class Americans across the country,” said Charles Crain, Director of Tax and Domestic Economic Policy at the National Association of Manufacturers. “Americans deserve a proxy process that protects their hard-earned money and sets up reasonable guardrails for the firms that impact their retirement savings, and that’s exactly what this rule proposes.”
A second SEC rule proposal would modify the submission and resubmission thresholds for placing shareholder proposals on companies’ proxy ballots, streamlining and depoliticizing the process in order to focus company management on the issues that impact investors’ long-term savings. Combined with the proxy firm proposal, these reforms represent the capstone of many years of advocacy and hard work from manufacturers across the country. Going forward, the SEC will hear public comments on both proposals as the agency works to finalize and implement the new rules.
“These rules will help ensure that proxy voting decisions are made in the best interests of Americans saving for a secure retirement and manufacturers planning for long-term growth,” said Crain. “At the NAM, we intend to keep working with the SEC to ensure that both proposals are finalized and implemented appropriately in the weeks and months ahead.”
Washington, D.C. – Ahead of the midterm elections, the National Association of Manufacturers released its policy roadmap, “Competing to Win,” a comprehensive blueprint featuring immediate solutions for bolstering manufacturers’ competitiveness. It is also a roadmap for policymakers on the laws and regulations needed to strengthen the manufacturing industry in the months and years ahead.
With the country facing rising prices, snarled supply chains and geopolitical turmoil, manufacturers are outlining an actionable competitiveness agenda that Americans across the political spectrum can support. “Competing to Win” includes the policies manufacturers in America will need in place to continue driving the country forward.
“‘Competing to Win’ offers a path for bringing our country together around policies, shared values and a unified purpose,” said NAM President and CEO Jay Timmons. “The NAM is putting forward a plan filled with ideas that policymakers could pursue immediately, including solutions to urgent problems, such as energy security, immigration reform, supply chain disruptions, the ongoing workforce shortage and more. Manufacturers have shown incredible resilience through difficult times, employing more workers now than before the pandemic, but continued resilience is not guaranteed without the policies that are critical to the state of manufacturing in America.”
The NAM and its members will leverage “Competing to Win” to shape policy debates ahead of the midterm elections, in the remainder of the 117th Congress and at the start of the 118th Congress—including in direct engagement with lawmakers, for grassroots activity, across traditional and digital media and through events in key states and districts as we did following the initial rollout of the roadmap in 2016.
The document focuses on 12 areas of action, and all policies are rooted in the values that have made America exceptional and keep manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.
Learn more about how manufacturers are leading and about the industry’s competitiveness agenda at nam.org/competing-to-win.
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org