SEC Answers Pleas to Rein in Proxy Firms ISS, Glass Lewis (2)

The SEC has responded to corporate calls to add oversight for proxy firms such as Institutional Shareholder Services Inc. and Glass, Lewis & Co. that advise investors on voting their shares.

Investment managers shouldn’t outsource their voting responsibilities to proxy firms, according to new guidance the Securities and Exchange Commission approved Aug. 21 to outline managers’ duties. The commission also issued guidance urging proxy firms to provide more information on their methods and sources of information, with a warning that they could face repercussions for any flaws.

Companies have raised concerns that proxy firms hold too much sway over shareholder ...