November 16, 2018

Proxy Process Roundtable: 8 Interesting Things

Since I was in Washington DC for the Fall Meeting of the ABA Business Law Section, I thought I’d arrive a day early to attend the SEC’s “Proxy Process Roundtable.” Broc encouraged me to share the “look & feel” of the experience for those that have never visited the Mothership. So here’s eight interesting things that I noticed:

1. Lots of Speakers on Panels – There were three panels for the roundtable – each scheduled for 90 minutes. One panel had 10 speakers, another had 11 – and one had 14! That one ended up running over two hours – and one of the panelists didn’t even get to introduce himself till the very end. For comparison, we’re setting the agendas right now for next year’s “Women’s 100” events – and we have 9 speakers for all of our panels for an entire day.

In some cases, it was hard to get a good feel for a speaker’s views & ideas because their speaking time was limited (but some panelists definitely didn’t let that stop them!) – and as a listener it was hard sometimes to stay focused for such a long discussion, with no audience interaction. This is what a 14-speaker panel looks like – a total of 21 people up on the dais with all the SEC officials…

2. Short Opening Remarks – Chair Clayton limited his opening remarks to allow more time for the panelists to share their views. Remarks from Commissioner Stein, as well as Commissioner Roisman and Corp Fin Director Bill Hinman, were also very brief. In fact, the first panel started about 30 minutes early! Bill did take a moment to pay tribute to Evelyn Y. Davis, though.

3. Surprising In-Person Turnout – Broc warned me that the roundtable might be lightly attended. He said that in the old days, the SEC’s open Commission meetings & roundtables were well-attended. But now that they are webcast, people understandably watch online. So it was surprising to see that more than a hundred people were there in person, despite DC having the worst November snowstorm in 29 years. Here’s a picture of what the audience looked like.

4. NAM/Chamber’s Campaign Encouraged Attendance – Recently, the National Association of Manufacturers & the US Chamber have been running ads against proxy advisors – including full-page spreads in the WSJ and Washington Post. They’ve spent six figures on their media campaign! Here’s what the ads looked like. As part of this campaign, the groups operate – a site that had been encouraging folks to attend the last panel of the day (the one about proxy advisors).

5. Minor Infotainment (for a Conference) – Although not as riveting perhaps as “Bodyguard” (new Netflix series that Broc recommends; I haven’t seen it), the panels tended to be more entertaining than a typical conference panel. There were speakers on all sides of the issues & sparks flew on more than one occasion.

Chair Clayton, the Commissioners & Corp Fin Staff emphasized throughout the day that they were hoping to get some specific recommendations. A surprising number of panelists thought the shareholder proposal rules and proxy advisor framework is okay ‘as-is.’

This wasn’t everyone’s view (tended to be people who could be disadvantaged if the rules change, though not in every case) – and there were calls for targeted improvements like giving all companies some time to respond to voting reports before they’re public and some tweaks to the proposal submission thresholds. But when it came to proxy plumbing, there were more calls for change – maybe even a total overhaul. Even speakers that weren’t on that panel said they thought that’s where the SEC should focus its time & resources.

6. A Tweet War? – Recently, John blogged about “Tweet Fight! Nell Minow v. Main Street Investors Coalition.” For this roundtable, there was some live tweeting from the audience under #proxyroundtable – with most of the tweets coming from opposite ends of the spectrum: Main Street Investors Coalition v. ValueEdge Advisors (for whom Nell Minow is a part of) – as well as Minerva Analytics and others.

7. Going Through Security – Broc also shared stories about the old days & how visitors to the SEC used to be able to go upstairs and deliver packages, etc. without even checking in. Now, he warned me to go early, because you need to get a badge & go through a metal detector. They were efficient – but with the large attendance, I’m pretty sure it took me longer than airport security! In the morning line, I happened to befriend a fellow Minnesotan. And it was in the after-lunch line that I learned of the Main Street Investors Coalition’s ad campaign. So it wasn’t time wasted.

8. DC is Magical? – The night before the roundtable, Broc picked me up at the airport and we grabbed dinner at “The Wonderland Ballroom.” We soon met Frank Namin – who saddled up next to us and seemed to be this establishment’s resident magician. We had close-up seats as he fashioned a rose from a cocktail napkin – then levitated it (seriously, it levitated one foot away from us – just stayed floating in the air!) – along with many other illusions. Free entertainment! And nearly as exciting as that “Proxy Advisors” panel…

Broc’s Take: The Proxy Process Roundtable Might Not Mean Much

Broc’s ten cents on this topic is that it’s akin to oral arguments during a Supreme Court case. Broc believes that oral arguments don’t have a major impact how the SCOTUS Justices intend to vote except in rare instances (this study seems to argue otherwise). Broc doesn’t believe the roundtables really mean much – particularly with so many people on each panel. He recalls only one notable instance where a roundtable was truly worth listening too – when Evelyn Y. Davis was on a shareholder proposal roundtable in the early 2000s. Evelyn put on quite a show.

Broc feels there is some value to roundtables. The speakers can connect with each other. And even more importantly, the SEC Commissioners can get a sense of what each speaker is all about – and figure out which ones they might want to contact privately to learn more about a particular idea. But remember, we did this entire “song & dance” over a decade ago with “proxy plumbing” – with a roundtable & everything – and not much came out of that. But maybe this time will be different…

Poll: Will the Proxy Process Roundtable Mean Anything?

Let us know how you feel about the impact of the SEC’s roundtables in this anonymous poll:

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Liz Dunshee