A mixed week for the federal government last week (so, better than many). The U.S. Department of Labor (DOL) is acting again to protect current and future pensioners from mismanagement that would cost them their retirement security. Meanwhile, National Public Radio (NPR) gave a fawning review to a book defending the looting of Americans’ property. The federal government giveth...
DOL has proposed a new rule limiting private pension-fund involvement in shareholder votes of negligible financial relevance to the pension funds’ value. It would also require proxy-advisory firms – the companies that issue advice to institutional investors, like pension funds, about how to vote their shares in matters that come before shareholders at companies’ annual shareholder meetings – to justify their recommendations to the fund managers. The rule would thus increase transparency in the proxy-advisory process while saving the pension funds time and money.
As regular readers of this column know, most contested shareholder proposals are ESG proposals (named after their ostensible purpose: to improve the environmental, social and governance policies of the corporations). These are generally not well-reasoned, politically neutral attempts to advance their stated purposes. Instead, they are mostly leftwing partisan proposals designed to push corporations into political advocacy, backed up by the self-serving and incomplete research of the organizations that propose them. And increasingly these ESG proposals have been supported by the proxy-advisory industry (which is essentially a duopoly of Glass Lewis and Institutional Investors Services (ISS)).
Under the proposed rule, pension-fund managers would not be permitted to vote on shareholder proposals unless they had determined that the issue to be voted on was of pecuniary value to the pension fund, i.e., that the passage or defeat of the proposal is likely to have a meaningful effect on the value of the shares to the pension fund. Additionally, the managers would have to conclude that the pension fund’s holding in the company were large enough to make it likely that voting the shares would have a meaningful effect on the result of the vote.
The rule would also require that any proxy advisory service upon which the pension-fund managers rely in making their voting decisions provide sufficient information to permit a reasonable conclusion that the recommendation is based on the appropriate criterion – that is, the demonstrable pecuniary interest of the pension fund. Heretofore, the proxy advisors have had no particular obligation to provide the reasoning for their recommendations, and have not provided much. Under this rule, they would have to justify their conclusions with evidence, and presumably would also have to weigh the evidence that works against their proposal, and explain why they find that evidence insufficiently persuasive. This will add an important frisson of transparency and accountability to what has always been an opaque – and in recent years has increasingly appeared to be an inappropriately biased – process.
What do you think? The proposed-rule process now enters a comment period, and the Department of Labor, as required by federal regulatory law, has solicited public comments. Should you be interested in weighing in, whatever your take on the rule, I urge you to submit your comment here. Make sure to include the identification code RIN 1210-AB91 in your comment, along with the destination: Office of Regulations and Interpretations, Employee Benefits Security Administration, U.S. Department of Labor. Additional information is available at the top of the proposed rulemaking notice, available here.
Now compare and contrast: NPR stepped deep into the pseudo-academic (or perhaps just modern academic) muck when, at the end of August, it carried a puff piece on Vicky Osterweil and her ludicrous new book In Defense of Looting: A Riotous History of Uncivil Action. In the book, the author argues that looting is a way of “get[ting] people what they need for free immediately,” making them “capable of living and reproducing their lives without having to rely on jobs or a wage,” which, in the idiom of the hour, is fine. “Most stores are insured; it's just hurting insurance companies on some level. It's just money. It's just property. It's not actually hurting any people.”
The book also reveals, quel surprise, that the author is both a high-test anti-Semite and a police eliminationist. NPR has since backed away from its fawning treatment of this benighted soul, claiming that while it did fact-check its piece, it just hadn’t gone far enough. That’s a weird position to take considering that no one at NPR appears actually to have read the book, and because the updated article also includes many corrections.
To the breathless adorers and adopters of Osterweil’s unhinged stance, both at NPR and elsewhere, we need put only one short question: “What’s your address?” If this blatantly obvious follow-up question causes any consternation, then you can be sure you have caught another massive hypocrite who will reach for any excuse, no matter how absurd, to justify the ongoing, hard leftwing riots, but will shift position entirely should the real anti-racists (and anti-Marxists) come out into the streets to oppose BLM and Antifa with matching action. And you can, on this basis, discount anything else that these partisan hacks may have to say.
Well, one out of two ain’t so bad. The federal leviathan has certainly had worse runs.