Guiding Uniform and Responsible Disclosure Requirements and Information Limits Act of 2023

Floor Speech

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Mr. STEIL. Mr. Speaker, I rise in support of this bill, which will protect retirement savings from political interference by activists and their proxy adviser allies.

Mr. Speaker, I thank the chairman for including my legislation in this comprehensive package. My bill, the Protecting Americans' Retirement Savings from Politics Act, reins in proxy advisers and puts a stop to the political takeover of retirement investments.

Names like ISS and Glass Lewis may not make the headlines every day, but these two firms constitute a powerful proxy adviser duopoly. They are fueling a movement to weaponize Americans' retirement funds to push their political agenda. This hurts workers, our economy, and the returns on Americans' hard-earned retirement savings.

Under Chairman Gensler, the Biden SEC gutted safeguards that were meant to provide proxy advisers with accountability and transparency. The SEC has also given a green light to activists to inject politics into the boardroom by changing the rules and empowering unaccountable SEC staff. This has predictably led to a huge spike in politically motivated shareholder proposals.

ISS and Glass Lewis control 97 percent of the proxy adviser market, advising virtually all professional investors. ISS offers companies consulting services to address the same activist proposals they make recommendations on, which is an obvious conflict of interest.

My bill prevents this conflict and enforces the disclosure of other potential conflicts of interest.

On top of that, the proxy adviser firms don't bear any costs or responsibility or accountability for their misguided recommendations. Some of these proposals clearly harm shareholders' value. In some cases, they have even directed companies to do things that are against the law.

Hardworking Americans saving for retirement shouldn't bear these costs. Many, I think, would be shocked to learn that their investments aren't always being maximized to provide a secure retirement. Instead, they are being hijacked for political impact.

Congress needs to rein that in and prevent that abuse. My bill addresses this in several key ways.

First, it reforms the proxy process to reduce the number of duplicative, repetitive, and politically motivated shareholder proposals. Second, it establishes a registration process for proxy advisory firms, requiring them to disclose their conflicts of interest and methodologies, and restricting their ability to offer consulting services.

It also reimposes liability on proxy advisers for getting things wrong. It ends robovoting, the process that autofills proxy advisers' recommendations. This practice can magnify proxy advisers' errors and biases.

Third, the bill places requirements on institutional investors to ensure they are voting with Americans' best economic interests in mind. They can't just outsource judgment to conflicted proxy advisers. Retirement security is far too important.

The Protecting Americans' Retirement Savings from Politics Act is an essential part of this comprehensive and commonsense legislation. We need to step up to empower investors, restore transparency and accountability, and enhance competition.

Mr. Speaker, I urge my colleagues to support this legislation.

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