Steil Introduces the Corporate Governance Reform and Transparency Act
WASHINGTON, D.C.—Today, House Financial Services Committee member Bryan Steil (WI-01) introduced H.R. 5116, the Corporate Governance Reform and Transparency Act. H.R. 5116 holds proxy advisory firms accountable by requiring them to register with the Securities and Exchange Commission (SEC), disclose conflicts of interest, and make their methodologies publicly available. Reps. Andy Barr, Denver Riggleman, and Ann Wagner are cosponsors of H.R. 5116.
“Proxy advisors have a significant impact on corporate governance and the financial health of American public companies. My bill fosters proper oversight of this industry and increases transparency. This will improve corporate governance, protect investors, and create competition. The SEC has moved in the right direction with its recent proposals. It is time for Congress to act,” said Steil.
Proxy advisory firms advise pension plans, mutual funds, and other institutional investors on how they should vote on management and shareholder proposals at annual corporate meetings. These firms wield a significant amount of influence over corporate governance. Though proxy advisors have an important role to play in providing advice to institutional investors, their activities merit scrutiny due to their outsized influence over corporate governance in the United States. Furthermore, there are legitimate concerns about proxy advisory firm transparency, conflicts of interest, and the accuracy of their recommendations.
H.R. 5116, the Corporate Governance Reform and Transparency Act improves the proxy advisory industry and corporate governance by requiring proxy advisory firms to register with the Securities and Exchange Commission (SEC), disclose conflicts of interest and codes of ethics, and make their methodologies publicly available.
Steil is a member of the following House Financial Services Committee subcommittees: Investor Protection, Entrepreneurship, and Capital Markets; Housing, Community Development, and Insurance; and Diversity and Inclusion. Steil is also a member of the Financial Services Committee Task Force on Financial Technology.