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Welcoming Remarks at Proxy Advisory Services Roundtable

Chair Mary Jo White

Dec. 5, 2013

Good morning. Welcome to today’s roundtable on proxy advisory services.

Let me begin by thanking all of our panelists for sharing their views on an important set of issues of interest to the SEC and to investors, issuers, and the securities market generally. There is no substitute for getting the right people in the same room to air the various points of view.

And we have assembled a very impressive group of professionals representing a range of perspectives to help inform us as we continue our study of the use of proxy advisory services and the various calls for reform.

In addition to our panelists, we have many others attending in person or watching online — and we welcome all of your views as well, including through our public comment file on our website.

As you know, for obvious reasons, the proxy process has been of significant interest to the Commission for a number of years. Exercising the vote on important issues is one of the most important rights that investors have. The system that allows investors to exercise that right needs to be a robust, effective and workable one.

In 2010, the Commission published a comprehensive concept release on the proxy voting system, seeking comment as to whether the U.S. proxy system as a whole operates with the accuracy, reliability, transparency, accountability and integrity that investors and issuers should expect. As part of that release, the Commission sought information about the role of third parties in the proxy process, including proxy advisory firms.

Proxy advisory firms clearly play an important role in the proxy process by, among other things, assisting investors in analyzing and considering how to vote their shares.

The proxy process truly lies at the center of the ongoing and important dialogue between companies and investors. It is this dialogue — that includes the investors who own the companies, the executives who run them and the boards that oversee them — that helps to ensure companies are responsive to their investors and investors are properly informed about the decisions they are asked to make.

Today, through this roundtable, we are continuing our examination of the proxy process with an important discussion about the use of proxy advisory services by investment advisors and institutional investors.

Our agenda is divided into two parts. The first focuses on the factors that have contributed to the use of proxy advisory services and the purposes they serve. The second focuses on current topics of interest, including conflicts of interest that may exist for proxy advisory firms and users of their services, the transparency and accuracy of the recommendations made by proxy advisory firms, and what the nature and extent of reliance by investors on proxy advisor recommendations is and should be.

I am particularly interested in the discussion of conflicts of interest that may or may not arise in connection with the participation of proxy advisors in our system — what they are and views on how they should be addressed.

I also hope to hear about the process by which proxy advisory firms formulate their voting positions and governance ratings, the transparency of the process, and whether and how additional transparency may be introduced into the process.

The SEC’s commitment to open and complete dialogues extends to our own decision-making processes, which is why we have asked you all here today. And we look forward to a lively and informative discussion.

Speaking for my fellow Commissioners and the SEC staff, we very much appreciate your willingness to participate in this roundtable. Your insights and experiences will be invaluable.

Thank you.

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