Committee backs disclosure requirement for proxy advisors' recommendations
The committee passed a bill requiring proxy advisory firms to disclose whether recommendations are based on a financial analysis; the bill allows attorney general enforcement and a civil cause of action. Senator Mann asked about funds that use ESG criteria; sponsor said the measure is disclosure-focused.
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Floor leader Senator Daniels presented legislation aimed at increasing transparency from proxy advisory firms by requiring disclosure when their recommendations are not based on a written financial analysis. Daniels said some proxy advisors do not always conduct financial analyses and may base votes on other factors; the bill would require disclosure to clients and would allow enforcement through the attorney general and civil action.
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