Client Directed Voting - White Paper Published by Council of Institutional Investors

The SEC's concept release notes that commentators have recommended that the SEC adopt rules to facilitate "client-directed voting" (CDV) as a means to increase investor participation in the voting process. The SEC prefers the term "advance voting instructions."  On August 31, 2010, the Council of Institutional Investors(CII) published a 36 page white paper.

The punch line of the paper is that it recommends continued evaluation of CDV but does not endorse the concept.

"The complexity of CDV and the policy and regulatory issues it entails suggest to us that a robust CDV model is likely to have a long gestation period, particularly since any CDV model must be considered in light of the wide range of proxy infrastructure questions that the SEC is now raising as part of its concept release. Other regulatory changes may be more expeditious and, possibly, more effective tools to increase [retail beneficial owners] participation. Regulatory changes that would simplify the voting framework and enhance communications generally, such as through the elimination or adjustment of the OBO/NOBO framework to favor disclosure of shareowner identities or by promoting more robust broker-dealer online voting platforms, seem to us to be a more effective approach that should merit priority consideration. Perhaps more importantly, at least some of these other reforms can be achieved — in contrast to CDV — in a way that does not require consideration of investor protection principles that underpin the SEC’s proxy rules."