October 20, 2010
In Section IV.B. of the Concept Release, the SEC discusses ways in which retail investors might be encouraged to participate more fully in the proxy voting process. One barrier to increased retail investor participation in the proxy voting process, which also exists for smaller institutional investors who do not engage proxy advisory firms, is the difficulty in obtaining information about agenda items in sufficient time to determine a position on the issues. This can be a particular concern with regard to proposals submitted for consideration from dissident investors in shareholder proposals, since many of the issues raised concern complex public policy issues. One way to address this problem, and facilitate more democratic debate about the issues to be voted on, would be to require issuers to report on any shareholder filings in advance of the issuance of proxy materials. For example, issuers might be required to include in 8-K statements information about the formal submission of a matter for consideration at annual meetings, shortly after the issuer receives such a submission from an investor.
In Section IV.C. of the Concept Release, the Commission discusses data tagging and whether it should be employed to better facilitate use of the proxy voting system. Data tagging is a very good idea. Currently, determining what matters are to be voted on requires an arcane knowledge of securities filings that can be off-putting to the uninitiated. The use of data tagging would be extremely helpful to investors who want to quickly extract information critical to their voting participation and decision-making.
A short list of data tags useful for inclusion with respect to shareholder resolutions would include:
--record date
--proposal number
--a meaningful description of the proposal's subject that conveys what is being proposed, with a subject, verb and object in the description (not simply "shareholder proposal 2")
--text of the proposal
--resolved clause of the proposal
--management's response to the proposal and
--deadline for submitting shareholder proposals for the next annual meeting.