“The rule leaves most majority of investors a hard choice: maintain a diversified and well-balanced portfolio as experts recommend but be shut from corporate discourse, or participate in the conversation but take on the greater risk that investing $25,000 of retirement savings in a single stock will pay off?” said Crenshaw in a statement.
Commissioner Allison Herren Lee also opposed the changes because of their impact on markets and small investors. “Retail investors will be greatly disenfranchised … the rights of smaller investors [are] valued at zero.”
The new rules are especially problematic for Investor groups focused on environmental, social and governance factors that affect companies.
Danielle Fugere, president of As You Sow, noted that the SEC vote “comes at a time when shareholders are appropriately acknowledging — and asking their companies to address — a wide range of social and environmental issues that have the potential to harm our environment, economy, and companies’ value. The market is moving inexorably into a new era of sustainable business practices; the SEC’s new rule demonstrates a failure to understand and support this necessary transition.”
Her colleague Andrew Behar, the CEO of As You Sow, said the changes “will force shareholders to escalate to litigation and other means.” Read Full Article - Think Advisor, September 24, 2020