Former Securities and Exchange Commission (SEC) Commissioner Daniel Gallagher, co-author of a 2015 WLF Working Paper, “Shareholder Proposals: An Exit Strategy for SEC,” testified before a subcommittee of the House Committee on Financial Services on May 17. The hearing was entitled, “Legislative Proposals to Enhance Capital Formation, Transparency, and Regulatory Accountability.”
Mr. Gallagher’s written testimony referenced the January 10, 2014 comments WLF filed with SEC criticizing the current proxy voting regime. Echoing his arguments in the 2015 WLF Working Paper, Mr. Gallagher urged the Committee to move beyond attempting to reform federal regulation of the proxy voting process and instead leave such oversight to the states. He wrote, “These proposals are meant to approximate the increasingly antiquated notion of an in-person annual shareholder meeting. It’s like listening to a cassette recording of a Victrola, while everyone else is on their iPhones.” He wryly added in a footnote to that statement, “I will now wait for the hipsters of the corporate governance community to tell me that my analogy is wrong because the analog nature of the record and cassette recordings makes them preferable to the digital content on an iPhone.”