Professional Associations
"The proxy voting process has been put together, and amended, in bits and pieces over many years. We believe that it is time for a close examination and consideration of significant changes. There have been significant advances in technology, and in systems and processes developed in other countries, that warrant study. For example, other countries have developed processes which link beneficial owner and issuer more closely, reducing intermediation and cost, and offering efficiencies through the availability of competing service providers." Society of Corporate Secretaries & Governance Professionals, SEC Comment Letter, May 11, 2007, SEC File No. 4-537.
"NOBO-OBO Rules. Current rules permit stockholders who buy stock through a broker to remain anonymous to the companies they buy. An owner can identify himself as an 'objecting beneficial owner' (OBO) or 'non-objecting beneficial owner' (NOBO). Currently the default choice is OBO, which shields the purchaser's identity. This makes direct communication with the purchaser more difficult and costly for the company in director elections and other matters. NACD has joined with the Business Roundtable and others to remove this impediment to transparent communications between companies and their owners." Report of the NACD Blue Ribbon Commission on the Governance Committee, chaired by John A. Krol, Washington, D.C., National Association of Corporate Directors, 2007, p.6.
"Our concerns as issuers derive from the fact that U.S. public companies do not know who their owners are; in an age of transparency and disclosure most of the ownership of a U.S. public company is unknown to the company. The result of the current process is substantial 'social waste' as firms pay substantial sums to seek to identify and communicate with their owners; and it fosters and shields assorted undisclosed practices which decouple voting from economic interest. When all votes were 99-1 the imperfections of this system did not matter; now this all matters very much for all affected parties. We believe that the system can be revised to take into account legitimate considerations such as confidentiality and trade secrecy. At the same time, the system could be streamlined making it more cost-efficient, enhancing the opportunities for stockholder communications and voting, and reducing the opportunities for fraudulent and unethical conduct." Carol Hayes and Cary Klafter, Society of Corporate Secretaries & Governance Professionals, Comment Letter to the New York Stock Exchange, June 27, 2006.
"We respectfully submit that these comment requests raise 'global' policy issues that go to the heart of the viability of the current street-name system established by statute and Commission rules, including but not limited to beneficial owners' right to financial privacy, and whether individuals opting for OBO status should be required to bear the attendant costs." Dixie Johnson, American Bar Association, SEC Comment Letter, April 4, 2006, SEC File No. S7-10-05, p. 11.
"[W]e believe that the shareholder communications rules should facilitate effective and efficient communications between companies and all of the beneficial owners of their securities. Technology should be embraced to make these communications more timely and allow companies to communicate directly with their shareholders." Luise Welby, Association of Corporate Counsel, SEC Comment Letter, February 13, 2006, SEC File No. S7-10-05.
"The Centre supports a further review of [current NOBO/OBO] rules to allow a higher level of communication between companies and their shareowners. We advocate practices that allow issuers to communicate directly with shareowners, including owners who hold in a "street name." Kurt Schacht, CFA Institute, Comment Letter to the American Bar Association, August 12, 2005. Note: The CFA Institute has not adopted a position regarding the Shareholder Communications Coalition and the other issues it is advocating.
"... the proxy machinery needs to be updated. The voting rights of shareholders has to be reexamined." Robert Todd Lang, American Bar Association, SEC Roundtable on Proposed Security Holder Director Nominations Rules, Unofficial Transcript, March 10, 2004.
"The National Association of State Treasurers believes the Commission should undertake a comprehensive review of current proxy regulations. This review should include the consideration of proposals to ensure that investors have a meaningful role in the governance of the companies held in investment portfolios." Brian Krolocki, National Association of State Treasurers, SEC Comment Letter, June 13, 2003, SEC File No. S7-10-03.144
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