Oregon State Treasurer Elizabeth Steiner, MD, issued a statement in response to a new White House executive order which aims to restrict the proxy advisory industry and thereby reduce investor protections. The order directs federal regulators, including the Securities and Exchange Commission (SEC), to increase scrutiny of proxy advisory companies that assist shareholders by consolidating disparate information into usable reports and distilling complex voting measures on corporate practices. Some of these corporate practices create financial risks due to unsound environmental, labor, and other practices and shareholders are looking to make well-informed voting decisions. The White House order also directs certain federal agencies to investigate firms that assist institutional investors with upholding their fiduciary duties and exercising their shareholder rights.

Treasurer Steiner said:

“As Oregon’s chief investment officer, corporate engagement and accountability are vital to my role as a fiduciary because they protect the investments the Oregon State Treasury makes on behalf of public employees, school districts, and other public agencies who serve every Oregonian. Today’s White House order is the most aggressive step the federal administration has taken yet to undermine investor rights, corporate accountability, and transparency in the investment markets. Shareholders are owners. CEOs and corporate boards work for investors. At a time when Americans are facing an affordability crisis, the administration has chosen to pursue antitrust investigations that will harm investors, workers, and ultimately consumers instead of addressing corporate actions that are driving up prices. This order is an attack on investor free speech, responsible corporate governance, and trust in American markets, and it deals another blow to investor confidence and the national economy.”

The Oregon State Treasury invests on behalf of public entities and beneficiaries of the Oregon Public Employees Retirement System. Managing one of the nation’s largest pension funds and other public assets, Treasury holds investments in a large number of publicly traded companies. As a shareholder, Treasury relies on proxy voting as an essential tool to actively engage in corporate governance. Using the research and analysis of proxy advisory services is essential to performing that duty. While those services are vital in understanding voting options, they do not hold undue weight in final voting decisions.

Treasury votes on more than 50,000 resolutions in more than 5,000 corporate meetings each year. The volume and breadth of topics voted on make proxy advisors a vital resource to make informed voting decisions.

As a responsible shareholder and fiduciary, Treasury is committed to promoting good corporate governance, addressing social and environmental risks, and encouraging companies to make decisions that enhance long-term value. Treasurer Steiner’s past statement on responsible investing can be found here.