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H.R. 4015: Corporate Governance Reform and Transparency Act of 2017

This was a vote to pass H.R. 4015 in the House.

H.R. 4015 enhances transparency in the shareholder proxy systems by requiring proxy advisory firms to register with the Securities and Exchange Commission (SEC), disclose potential conflicts of interest and codes of ethics, and make publicly available their methodologies for formulating proxy recommendation and analyses.

Each year, public companies hold shareholder meetings at which the company’s shareholders vote for the company’s directors and on other significant corporate actions that require shareholder approval. As part of this annual process, the SEC requires public companies to provide their shareholders with a proxy statement before shareholder meetings. A proxy statement includes all important facts about the matters to be voted on at a shareholder meeting, including, for example, information on board of director candidates, director compensation, executive compensation, related party transactions, securities ownership by certain beneficial owners and management, and eligible shareholder proposals. The information contained in the statement must be filed with the SEC before soliciting a shareholder vote on the election of directors and the approval of other corporate actions. Solicitations, whether by management or shareholders, must disclose all important facts about the issues on which shareholders are asked to vote.

In 2003, the SEC adopted a rule under the Investment Advisers Act of 1940 requiring an investment adviser that exercises voting authority over its clients’ proxies to adopt policies and procedures designed to ensure that the investment adviser votes those proxies in the best interests of its clients. The SEC rule cover institutional investors—including investment advisers to mutual funds and pension funds—who hold shares in a large number of public companies, and the investment advisers to these funds annually vote billions of shares on behalf of their clients on thousands of proxy ballot items. One way the investment adviser can demonstrate that it has voted in the best interests of its clients and not a product of a conflict of interest is to vote pursuant to a predetermined policy based on the recommendations of an independent third party. Thus, largely as a result of the SEC’s regulations, proxy advisory firms now wield outsized influence in the U.S. proxy system. But the system created by the SEC regulations does not eliminate the conflict of interest concerns from proxy voting. Regulators, market participants, and academic observers have highlighted potential conflicts of interest inherent in the business models and activities of proxy advisory firms themselves. For example, proxy advisory firms may feel pressured by their largest clients—many of whom are activist investors—to issue voting recommendations that reflect those clients’ specific agendas.

The Committee is aware of numerous instances whereby the two largest proxy advisory firms have issued vote recommendations to public company shareholders that include errors, misstatements of fact, and incomplete analysis. Some proxy advisory firms’ recommendations have been made without any contact to the public company, and these same proxy advisory firms encourage companies to join their service in order to have the privilege to “influence” an advisory firm’s recommendations.

Source: Republican Policy Committee


All Votes R D
Yea 55%
Nay 42%
Not Voting 3%

Date: Dec 20, 2017

Question: On Passage of the Bill in the House

Required: Simple Majority

Result: Passed


Ideology Vote Chart

Key: R Yea D Yea R Nay D Nay
Seat position based on our ideology score.

Cartogram Map

Each hexagon represents one congressional district.

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Vote Details

Notes: The Speaker’s Vote? “Aye” or “Yea”?
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Statistically Notable Votes

Statistically notable votes are the votes that are most surprising, or least predictable, given how other members of each voter’s party voted and other factors.

All Votes