We generally agree with the CSA’s recommended practices for proxy advisory firms. Given their importance to the voting decisions of institutional investors, their methodologies, conflicts of interest and communication practices should be disclosed to clients and publicly as set out in the Proposed NP. As CFA charter holders, we must exercise diligence, independence, and thoroughness in analyzing investments, as well as have a reasonable and adequate basis, supported by appropriate research and investigation for any investment recommendation or action.
Overview of the Council’s Comments:
We do not believe it is necessary to obtain confirmation from clients that they have reviewed and agreed with the proxy advisory firm’s guidelines. It is more important that those guidelines are disclosed, and then it is the investor’s responsibility to perform their own diligence on a proxy firm’s guidelines and recommendations.