PowerUp: Rep. Bryan Steil bill checks woke proxy advisors

Empower Wisconsin | Jan. 10, 2023

U.S. Rep. Bryan Steil says the investor left is using America’s retirement funds to advance its radical agenda.

Wisconsin’s 1st District congressman has introduced the Putting Investors First Act, a bill Steil says will disrupt the woke attack on American capitalism.

“Americans are already seeing their retirement savings shrink because of Washington’s reckless spending,” the Janesville Republican said. “We need to empower investors, restore transparency and accountability, and enhance competition.”

As the bill’s sponsors note, about 70 percent of the outstanding shares in publicly traded U.S. companies are held by institutional investors such as mutual funds and pension funds. American families depend on these institutional investors to manage their retirement savings, including voting their shares.

But to save costs, many institutional investors rely on proxy advisory firms for recommendations on how to vote the shares under their control. Here’s the problem: Just two proxy firms — Institutional Shareholder Services (ISS) and Glass Lewis — control some 97 percent of the proxy advisory market. These power brokers reportedly make nearly 38 percent of all shareholder votes.

“Americans are already seeing their retirement savings shrink because of Washington’s reckless spending. We need to empower investors, restore transparency and accountability, and enhance competition,” Steil said.

The Putting Investors First Act, among other things, would require proxy advisory firms (or any other firms providing voting advice) to demonstrate that their vote recommendations are in the best economic interest of shareholders.

Vivek Ramaswamy, executive chairman of Strive Asset Management, and Riley Moore, West Virginia’s State Treasurer, in a Wall Street Journal op-ed wrote that ISS and Glass Lewis are often the firms in charge of voting the proxies of massive state and employee pension funds. They advance their own ideologies by supporting liberal shareholder resolutions on behalf of unsuspecting state employees, Ike Brannon wrote in a Forbes column headlined, “The Need to Diminish The Power Of Proxy Advisory Firms.”

Brannon noted that last year the Texas Committee on State Affairs authorized a legislative subpoena to compel ISS and investment management firm BlackRock to appear before the committee.

“The reason the committee is requesting the production of documents is to evaluate the investment practices of a financial services firm with a presence in Texas and how those practices affect the state’s public pensions,” the Texas Senate Committee on State Affairs said in a statement.

Committee members said  that while each firm has produced documents, some have submitted “more than others.” But BlackRock has “refused” to submit documents it deems as confidential or internal.

Pushing radical climate change and woke corporate governance principles is costing average investors a lot of money, critics say.

“Proxy advisory firms are uniquely complicit in the woke environmental, social, and governance agenda that is poisoning our capital marks,” said Rep, Andy Barr (R-Kentucky), senior member of the House Financial Services Committee.

It’s all part of the so-called environmental, social and governance (ESG movement) driven by the left and mammoth index investment firms such as BlackRock. The polices have in many ways been endorsed by the federal government through the leftist Biden administration.

 A handful of states, including Florida and Missouri, have removed billions of dollars from BlackRock over the firm’s ESG agenda. Vanguard, the second largest asset manager, opted to leave the group of ESG investors that have focused on costly, economically disruptive and, many argue, impossible zero-carbon initiatives.

Chris Netram, managing vice president of Tax and Domestic Economic Policy at the National Association of Manufacturers, said proxy advisory firms’ errors and conflicts of interest continue to harm manufacturers’ competitiveness.

“Given the (Security and Exchange Commission’s) unlawful attempts to roll back the landmark 2020 proxy firm rule, legislation is clearly needed to protect issuers and investors alike,” Netram said. “The NAM strongly supports the Putting Investors First Act, which would increase transparency into these powerful firms and safeguard Americans’ financial security.”

Co-sponsors of the bill include U.S. Reps. Drew Ferguson (R-Georgia), Troy Balderson (R-Ohio), Elise Stefanik (R-New York), Michael Burgess (R-Texas) and Scott Fitzgerald (R-Wisconsin’s 5th CD).

“Increasingly, these unaccountable entities – rather than through the processes set forth in our Constitution – are the vehicle of choice for special interests to achieve their objectives and cancel dissenting voices. Safeguards and transparency are long overdue,” Balderson said.

Steil has sent several letters to the SEC regarding changes to proxy advisor rules being made by commission Chairman Gary Gensler.

“The Financial Services Committee, which oversees functions like the Securities and Exchange Commission, hasn’t even had Chairman Gensler come before the committee in over two years. That’s going to change” now that Republicans are in control,  Steil told Empower Wisconsin’s M.D. Kittle on a recent edition of the Vicki McKenna Show.

Listen to the full interview with Rep. Bryan Steil on PowerUp, Empower Wisconsin’s podcast.

Listen to more:

Explore More

  • Senators re-introduce No Taxpayer Funding for Abortion Act

    Empower Wisconsin | Jan. 27, 2023 The No Taxpayer Funding for Abortion Act, the lawmakers say, attempts to clean up…

  • All Woke Up: ‘Affirming care’ for sadomasochists

    Empower Wisconsin | Jan. 27, 2023 The Hippocratic Oath doesn’t include a command that physicians provide “affirming care” for patients…

  • PowerUp: Big Money Left all in on Wisconsin Supreme Court race

    Empower Wisconsin January 27, 2023 The national left is all in on Wisconsin’s crucial Supreme Court race, a contest that…

  • Fiscal hawks demand fiscal reform for debt ceiling deal

    Empower Wisconsin Jan. 26, 2023 Fiscal hawks in the Senate reiterated their demands for fiscal reforms and spending cuts Tuesday…

  • Evers signals big spending ahead in State of the State

    Empower Wisconsin Jan. 25, 2023 By M.D. Kittle MADISON — In his fifth State of the State address Tuesday evening,…

  • Spotlight| Study: Choice schools outperforming public peers

    By M.D. Kittle MADISON — On this National School Choice Week, a new study by the Wisconsin Institute for Law…

Leave a Reply

Your email address will not be published. Required fields are marked *