TO THE MEMBERS OF THE U.S. HOUSE OF REPRESENTATIVES: The U.S. Chamber of Commerce opposes Amendment #11, offered by Rep. Maxine Waters and Rep. Brad Sherman, to H.R. 7617, the “Defense, Commerce, Justice, Science, Energy and Water Development, Financial Services and General Government, Homeland Security, Labor, Health and Human Services, Education, Transportation, Housing and Urban Development Appropriations Act, 2021.” This Amendment would defund the implementation of the Securities and Exchange Commission’s (SEC) recently approved rulemaking and guidance providing oversight of proxy advisory firms, transparency on proxy advice, and ending conflicts of interest. The Chamber will consider including votes related to this amendment in our “How They Voted” congressional scorecard.
Despite being plagued by conflicts of interest, a lack of transparency, and significant errors in voting recommendations, proxy advisory firms continue to carry a significant amount of influence over corporate governance at America’s public companies. The two dominant proxy firms—Institutional Shareholder Services (ISS) and Glass Lewis —control roughly 97% of the proxy advisory industry, constituting a duopoly that has become the de facto standard setter for corporate governance in the U.S. without any meaningful input from shareholders or issuers. The status quo has created distortions in the capital markets and has made it more difficult for companies to go and stay public.