Roger Coffin, associate director of UD's John L. Weinberg Center for Corporate Governance.

Proxy recommendations

UD's Weinberg Center assembles industry leaders to improve proxy voting


1:17 p.m., Aug. 4, 2011--Leaders from across the financial services industry, who assembled at the University of Delaware’s John L. Weinberg Center for Corporate Governance recently, say a series of actions should be taken to ensure the integrity of the nation’s shareholder voting process. 

The actions in “The Report of Roundtable on Proxy Governance: Recommendations for Providing End-to-End Vote Confirmation” outline a series of what the roundtable members – comprised of a diverse group of industry representatives and experts on the proxy process – characterize as achievable steps to improve shareholder voting. Those steps include a methodology to provide investors specific confirmation of their vote and the transparency necessary to ensure voting accuracy.

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The report was presented Thursday, Aug. 4, at the American Bar Association annual meeting in Toronto by Roger Coffin, associate director of the Weinberg Center and roundtable co-chair.  

In a call to action, Coffin said, “Corporate elections are the fundamental underpinning of our system of corporate governance. Transparent and accurate elections, including those for directors, are essential for shareholder protection, corporate integrity, and economic growth.”

The group’s report says the actions will provide both retail and institutional investors a degree of certainty and comfort that their votes are counted as cast.  In addition, the report contains the recommendation and suggestions for periodic examinations or reviews of the system as a whole, to provide assurance of integrity and accuracy.  

The report, available for download in PDF format at the Weinberg Center website, contains specific, tangible solutions in four core dimensions to improve voting accuracy and transparency:

  • Early-stage entitlement confirmation:  All parties that anticipate submitting votes for a shareholders’ meeting should confirm their voting entitlements with the meeting tabulator within a defined period following the record date. The roundtable suggests six business days.
  • Encouragement of early voting: All shareholders, whether large or small, institutional or retail, are encouraged to cast votes early in the solicitation period and, in any event, no later than three business days before the shareholders meeting.  This recommendation addresses a major cause of potential voter disenfranchisement – late-stage voting, making thorough analysis and reconciliation by tabulators and nominees difficult.
  • Enhancements to exception processing:  Tabulators should promptly communicate to vote-reporting entities the reasons vote reports are being rejected.  The roundtable believes such communication should be on the day after a tabulator identifies the discrepancy.
  • Vote confirmation:  The proxy process should enable investors to obtain, via the Internet or other electronic means, a vote confirmation on a demand or as needed basis. The existing Voting Instruction Form (VIF) control numbers serve as the unique identifier needed to facilitate vote confirmation. The report also provides for confirmation of the overall proxy system through audits and other reviews.

The group’s recommendations are, in part, in response to the concerns outlined in the Securities Exchange Commission’s July 14, 2010, concept release.

“This report is groundbreaking as the first time key individuals involved in the proxy system put aside their competitive differences for the greater good of our financial market system,” said Coffin. 

“What distinguishes the work of the Roundtable on Proxy Governance is the commitment to practical, realistic and achievable goals,” said roundtable co-chair Maryellen Andersen, senior vice president, Broadridge Financial Solutions, Inc. “The roundtable did not set out to address all issues in the proxy system.  Instead it focused its efforts on areas that could be addressed immediately, without the need for SEC rulemaking or large-scale overhaul of the system.  It was a results-oriented, action focused process that will clearly benefit investors, issuers and providers.”

“The Roundtable on Proxy Governance brought together some of the best minds in the business to address important, hot-button issues,” said Steve Norman, retired corporate secretary of American Express and roundtable secretary. “Bankers, brokers, issuers, institutional investors and transfer agents checked their personal interests at the door and worked together to iron out solutions to major challenges within the proxy system. It was an important learning experience for all involved.”

With an emphasis on developing practical solutions, the Weinberg Center invited persons actively engaged in and knowledgeable about all areas of the shareholder voting process, including tabulators, transfer agents, banks, brokers, issuers, public and private fund managers, regulators and proxy service providers.  Individuals participating in the Roundtable on Proxy Governance included:

  • Maryellen Andersen, roundtable co-chair, Broadridge Financial Solutions, Inc.
  • Thomas Ball, Morrow & Co.
  • Kenneth Bertsch, Society of Corporate Secretaries and Governance Professionals
  • Brian Breheny, Skadden, Arps, Slate, Meagher & Flom LLP
  • Anne T. Chapman, Capital Research & Management Co.
  • Roger Coffin, roundtable co-chair, Weinberg Center for Corporate Governance
  • Katherine K. Combs, Society of Corporate Secretaries and Governance Professionals
  • Lyell Dampeer, Broadridge Financial Solutions, Inc.
  • James Duffy, NYSE Euronext
  • Charles Elson, Weinberg Center for Corporate Governance
  • Mario Esposito, Pershing LLC
  • Richard Gottcent, Georgeson, Inc.
  • Janice Hester-Amey, California State Teachers’ Retirement System
  • Virginia Holton, Depository Trust & Clearing Corporation
  • Michelle Jackson, Broadridge Financial Solutions, Inc.
  • Donald D. Kittell, Broadridge Financial Solutions, Inc.
  • David Martin, Covington & Burling LLP and legal adviser to the Roundtable
  • Ron Miele, Goldman Sachs & Co.
  • Ronnie O’Neill, Bank of America Merrill Lynch
  • Stephen P. Norman, roundtable secretary, S.P. Norman & Co. LLC
  • Mario Passudetti, Bank of New York Mellon
  • Anand Ramtahal, FINRA
  • Peter Reali, TIAA-CREF
  • Brandon Rees, Office of Investment, AFL-CIO
  • Charles V. Rossi, Computershare
  • Carol V. Schwartz, American Express Company
  • Kathryn J. Sevcik, Wells Fargo Shareowner Services
  • Dannette Smith, United Health Group
  • Chad Spitler, BlackRock
  • Darla C. Stuckey, Society of Corporate Secretaries and Governance Professionals
  • Joseph C. Swanson, Northern Trust Company
  • Meagan Thompson-Mann, Principles for Responsible Investment (United Nations)
  • Frank Zarb, partner, Proskauer Rose LLP and legal adviser to the roundtable

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