On January 12, 2009, the Council of Institutional Investors, a nonprofit association of more than 140 public, union and corporate pension funds, forwarded a letter to the Chairman of the Senate’s Committee on Banking, Housing and Urban Affairs, Senator Christopher Dodd. In its letter, the Council noted that regulation alone is not enough to solve the financial crisis and hold management and boards accountable. But rather, the “Council believes that key corporate governance reforms are essential to providing meaningful investor oversight.” As such, the Council suggested several key issues for the Senate Banking Committee to consider during the confirmation hearing of Mary Schapiro to be the Chair of the SEC. Some key areas of concern to the Council include proxy access, broker voting, international accounting and auditing standards, credit rating agencies, and enforcement.
In the proxy arena, the Council suggests that the Committee asks the nominee whether she would “direct the commission to reconsider the issue of proxy access” in light the SEC’s recent rejection of that would have permitted shareholders access to board nominations and elections. The Council also wants the Committee to ask her opinion “on the SEC’s recently proposed roadmap for the U.S. adoption of” International Financial Reporting Standards given that there is no clear “consistency in the implementation, interpretation and enforcement of IFRS standards worldwide.” Due to credit rating agencies’ roles in the financial crisis, the Council wants the Committee to get her view on whether the agencies “should be held responsible for consistently issuing inaccurate credit ratings.”
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