Comment Letter to the SEC: The Value of Board Voting Recommendations

Abstract

This comment letter to the SEC's staff roundtable on the proxy process requests the SEC to provide investment advisers with a liability safe harbor under the Investment Advisers Act of 1940 when using board voting recommendations in voting their proxies as long as their clients do not prohibit their use and no significant business relationship exists between the investment adviser and the company whose shares are being voted. The implementation of this safe harbor will effectively reverse and correct a long-standing SEC policy where the value of proxy advisor recommendations is recognized but the value of board voting recommendations is not. This policy has existed even though a strong argument can be made that board voting recommendations are more informed and precise than proxy advisor voting recommendations. That argument was made in my comment letter dated October 12, 2018. This submission can be considered a continuation of that letter.