Citing concerns that proxy advisory firms “not only increase the costs of being a public company, but also create disincentives for companies to become public in the first place,” Nasdaq OMX Group has petitioned the Securities and Exchange Commission for new disclosure and transparency demands on how those firms formulate their recommendations.
The petition requests that the SEC revise guidance issued nearly ten years ago and demand disclosure of the models, formulas and methodologies used to make recommendations on how shareholders should vote. Disclosure is also urged for “all relationships that may give rise to conflicts of interest.” Nasdaq also takes issue with the firm’s tendency for “one-size-fits-all” assessments that deal in marketplace generalities, not company-specific matters.
