Presenter outlines proxy-adviser transparency bill requiring disclosure of financial analysis

A presenter introduced a proposal the committee described as a proxy-adviser transparency act, saying the measure would require proxy advisers either to disclose when a recommendation to vote against management is not based on a written financial analysis or to provide that analysis to companies and clients on request. "This bill basically deals with proxy advisors, the transparency act," the presenter said.

The presenter told the committee that many investors rely on proxy advisers and that Department of Labor guidelines lead fiduciaries to vote proxies because of potential effects on shareholder value. The presenter asserted that some proxy-adviser recommendations — for example, urging companies to set emission targets or align lobbying with net-zero goals — are not always grounded in financial analysis and therefore may not serve shareholder value. "States can ensure that investors using proxy advisers are given truthful information related to those advisers' recommendations," the presenter said. The presenter also said violations would be treated as violations of the state's unfair and deceptive acts and practices law.

Committee action followed without extended debate: the chair moved adoption of the committee substitute and members approved the motion by voice vote. The committee recorded the motion as "do pass committee sub" and reported the bill out of committee for further consideration.