IM Director Daly Delivers Remarks on Proxy Voting

On January 8, Securities and Exchange Commission (SEC) Division of Investment Management Director Brian Daly delivered remarks at a meeting of the New York Bar Association and discussed proxy voting by registered investment advisers. In his remarks Director Daly outlined the fiduciary requirements to vote or not vote corporate proxies and detailed instances where an adviser may determine a vote is unnecessary because of cost or strategy. He noted that while proxy advisory firms can play an important role in research, analysis, and logistical support to an investment adviser when evaluating a given proxy(ies), the current landscape has permitted proxy advisers to have an outsized impact on the proxy process that may reflect certain political and social philosophies. Director Daly remarked that advisers who vote on a matter should “be empowered to utilize their best judgment and whatever resources they deem appropriate under the circumstances when making that vote.” He added, however, that investment advisers should be cognizant of whether a given vote represents a corporate governance position or an adviser’s or a proxy advisor’s personal view or opinion on a social or political matter. Lastly, he briefly noted that artificial intelligence has the potential to help immensely in this area specifically in the review of a proxy, formulating an analysis from data, and determining whether that aligns with the established investment strategy.

Click here to read IM Director Brian Daly’s full remarks.