We believe that voting standards and advice issued by proxy advisory firms need to be grounded in fact and reflect reality. With the release of these principles, we hope to initiate a dialogue among companies, investors, and proxy advisory firms to create a system that brings transparency and accountability to proxy advisory firms and fosters strong corporate governance.
At the core of the principles are that proxy advisory firms and advice:
- Are free of conflicts of interest that could influence vote recommendations;
- Ensure that reports are factually correct and establish a fair and reasonable process for correcting errors;
- Produce vote recommendations and policy standards that are supported by data driven procedures and methodologies that tie recommendations to shareholder value;
- Allow for a robust dialogue between proxy advisory firms and stakeholders when developing policy standards and vote recommendations;
- Provide vote recommendations to reflect the individual condition, status and structure for each company and not employ one-size-fits all voting advice; and
- Provide for communication with public companies to prevent factual errors and better understand the facts surrounding the financial condition and governance of a company.