DUBLIN May 17 U.S. regulatory official Daniel
Gallagher backed European efforts to ensure advisory firms give
unbiased guidance on how to vote at shareholder meetings, saying
on Friday there should be a global code of conduct.
Gallagher, a member of the Securities and Exchange
Commission, said a voluntary code of the kind recommended by the
European Union's financial services watchdog ESMA in February
could give reassurance on the independence of proxy advisers and
the quality of their work, Gallagher said.
"Clearly this code is an idea that should be rolled out
globally," Gallagher told a corporate governance conference in
Pension funds, insurance companies and other big
institutional investors often consult proxy advisors to help
them make decisions on how to vote on such matters as boardroom
appointments and pay and takeovers.
Tensions between them and the firms they monitor have ramped
up since the financial crisis prompted sharper criticism of
Gallagher said there was a risk of an "over-reliance on
these (advisory firms') opinions without full understanding of
how they were arrived at and the conflicts and other issues that
went into that decision making."
"I applaud ESMA for leading the charge on it. I think it is
absolutely right for (us to have) a similar ... global level
code of standards, and I will ... implore the SEC to be active
in encouraging that sort of project," he added.