NYC comptroller reports 100-fold rise in proxy access at companies since '14
More than 600 firms have adopted proxy access, a program launched under the New York City Comptroller’s Boardroom Accountability Project, a hundredfold increase since the program was launched, Comptroller Scott Stringer and the New York City Retirement Systems announced on Thursday.
Over 71% of S&P 500 firms now allow shareholders proxy access, which gives large, long-term shareholders such as the city’s pension funds the ability to nominate directors to company boards. This is up from just six companies in 2014 when the program was started.
Proxy access is also aimed at boosting corporate accountability and giving the city’s pensioners a stronger voice in the long-term oversight of the companies in which the systems invest, including issues related to the diversity of board members, the company’s approach to climate change and its treatment of employees.
“This is what progress looks like. Our campaign to change the face of corporate America is delivering groundbreaking change,” Stringer said. “In just five years, proxy access has radically transformed the corporate landscape, and what was once an obscure bylaw at just a handful of companies is now the market standard across the largest companies in the U.S.”
The Securities and Exchange Commission proposed a universal proxy access rule in 2003, but this failed in the face of corporate opposition. The SEC enacted proxy access in 2010 but this was later vacated after a court challenge. In 2014, Stringer launched his initiative and proxy access began to take hold as hundreds of companies began to adopt the rule.
The comptroller’s office said that increased board responsiveness provided by proxy access has pushed 62 companies to nominate 77 new board directors who identify as a woman or person of color. At least 24 companies have publicly committed to include women and people of color in the candidate pool for every board search going forward, also known as the “Rooney Rule,” the office said in a statement.
“Corporations have been in the business of raising barriers, shutting blinds, and avoiding accountability for far too long,” Stringer said. “Proxy access gives us the leverage to flip that script, and break open the insular systems which have enabled excessive CEO pay, dismal levels of boardroom diversity, and inaction on climate change. Most importantly, stronger board oversight leads to better long-term performance and helps protect the retirement security of hundreds of thousands of hardworking New Yorkers.”
Stringer is the investment advisor and custodian and trustee of the New York City Pension Funds, which total almost $208 billion as of June. The city pension funds are composed of the New York City Employees’ Retirement System, the Teachers’ Retirement System, the Police Pension Fund, the Fire Department Pension Fund and the Board of Education Retirement System.