« No supervision of proxy advisory firms »Julius Melnitzer | Financial Post
« The Institute for Governance of Private and Public Organizations is calling on regulators to require that proxy advisory firms ensure accuracy, provide transparency and avoid conflicts of interest in their recommendations and dealings.
The institute is an independent organization based in Montreal whose founders include activist investor firm Jarislowsky Fraser Ltd. Its mandate is to help public and private organizations create value through good governance practices.
“Proxy advisory firms have considerable influence on matters that have significant consequences for boards and management,” says Yvan Allaire, executive chairman of the institute. “Shareholders and public companies alike have expressed a myriad of concerns over their practices and influence.”
An institute study written by Mr. Allaire states that proxy advisory firms such as ISS and Glass Lewis “stand in a bully pulpit” that is both unsupervised and unregulated. At the same time, their business model “makes it virtually impossible for them to handle with care and responsiveness the sheer volume of reports they have to produce in a very short period of time.”
The report singles out proxy advisory firm ISS as “vulnerable to conflicts of interests” by offering other services to the same corporations for whom it makes proxy recommendations» … Lire la suite