The Securities and Exchange Commission should have a diminished role in corporate governance and, likewise, activist investors should have less influence over proxy voting, says SEC Commissioner Daniel Gallagher.
“It’s time we asked whether the shareholder proposal system as currently designed is a net negative for the average investor,” Gallagher said during a March 27 speech at Tulane University Law School. The stock ownership threshold for submitting shareholder proposals should increase from an “absurdly low” $2,000 to as high as $2 million, he suggested. Other changes could include extending the length of the current stock holding requirement, banning the practice of “proposal by proxy,” and new rules to clarify and tighten the SEC’s exclusion criteria.
