The Millstein Center for Corporate Governance and Performance at the Yale School of Management has made a series of proposals to boost transparency among institutional investors and the proxy voting services that advise them. In addition to investor transparency about policy, engagement; voting resources and tactics, the Center is also proposing a code of professional conduct for proxy services.
The proxy voting industry has been in the firing line in recent years over recommendations transparency and conflicts of interest. Practices highlighted in the code include a ban on a vote advisor performing consulting work for any company on which it provides voting recommendations or ratings.
Voting Integrity is based on independent research and insights from a round-table of major U.S. and European institutional investors and proxy advisers convened by the Millstein Center on January 29, 2008 and chaired by Lynn Turner, former chief accountant to the SEC.
“The economic crisis has highlighted as never before that the capital market’s health hinges on a reliable, open and efficient proxy voting system to keep corporate boards accountable,” said Ira M. Millstein, senior associate dean for corporate governance at the Yale School of Management. “The time has come for practical fixes.”
The briefing goes on to recommend that the U.S. Securities and Exchange Commission establish an independent commission to overhaul the U.S. share voting system; and that regulators should work with their global counter-parties to enable more efficient cross-border voting.