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Wagner Statement on Her Corporate Governance Examination Act

July 28, 2023

Washington, D.C. – Congresswoman Ann Wagner (R-MO), Chair of the Financial Services Subcommittee on Capital Markets, released the following statement on her Corporate Governance Examination Act, legislation that was marked up and passed by the Financial Services Committee this week:

“This important legislation will address potential issues from proxy advisors and will ensure the financial interests of retail investors are protected.  Too often politically or socially motivated shareholder proposals cause investors to shoulder increased and unnecessary costs.  Being a fiduciary means you have a responsibility to protect the best interest of investors, not follow a politicized proxy process.  My legislation will examine whether the proposal process has become unnecessarily politicized and help ensure these proposals don’t deter future investors or endanger current investors.”

Background

This legislation requires the SEC’s Advocate for Small Business Capital Formation to conduct a study, every five years, on shareholder proposals, proxy advisory firms, and the proxy process. The study will examine various issues such as incentives and obligations of stakeholders, the impact on retail investors, duopoly in proxy advice, costs for issuers, submission thresholds, and the role of proxy advisory firms, with reports to be submitted to relevant Congressional Committees. The bill would require the initial study to cover the previous 10 years, and then five years thereafter.