As the U.S. Securities and Exchange Commission turns its back on a bipartisan agreement on proxy advisory firms, the NAM is taking action.
The background: In 2020, the NAM supported—and the SEC finalized—a major rule to increase oversight and transparency with regard to proxy advisory firms. These unregulated and unaccountable entities influence publicly traded companies by recommending how institutional asset managers should vote in corporate proxy contests.
- Since last January, the SEC’s new leadership has taken steps to undermine and reverse the 2020 rule. The NAM has filed suit against the SEC for refusing to enforce the 2020 rule, called on the agency to provide “reliable rules of the road” and opposed a proposed rule to reduce proxy firm oversight.
The new rule: Yesterday, the SEC released a final rule that rescinds many of the critical reforms the NAM secured in 2020. Specifically, the new rule removes requirements for proxy firms to engage with impacted companies and their shareholders, and it weakens the 2020 rule’s anti-fraud provisions.
Arbitrary and capricious: The SEC is making these substantial changes absent any new evidence—because the 2020 rule was never allowed to take effect. It has also failed to articulate a satisfactory policy justification. Federal agencies are prohibited from issuing regulations that are “arbitrary and capricious”—an easy descriptor for the SEC’s actions given the agency’s abrupt and unjustified about-face.
NAM in action: The NAM announced yesterday that it plans to file suit against the SEC to preserve the 2020 rule. It will argue that the SEC’s decision to change course without allowing the 2020 rule to take effect and be fairly evaluated epitomizes arbitrary and capricious rulemaking.
What we’re saying: “The SEC has offered no justification for abandoning a decade’s worth of bipartisan, consensus-driven policymaking,” said NAM President and CEO Jay Timmons. “This move will undoubtedly harm the competitiveness of publicly traded manufacturers, and it will hurt Main Street investors.”
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