Hello and Farewell, but not Goodbye: Remarks at the Meeting of the SEC Investor Advisory Committee

Thank you, Brian [Schorr]. And good morning and welcome to all of you, especially our six newest IAC members. Our new class of members brings a wonderfully eclectic mix of skills and experiences. Thank you for putting them at the disposal of the Investor Advisory Committee. Welcome Alvin, Andrea, Amy, Craig, George, and Jennifer.[1] Today also marks the final meeting for seven sitting members whose terms expire in November:

• Jamila Abston-Mayfield
• Cambria Allen-Ratzlaff
• Brian Hellmer
• Sandra Peters
• Paul Sommerstad
• Alice Stinebaugh, and
• Joanne Yoo

Thank you for your willingness to give us four years out of your busy lives. I have enjoyed learning from you. I hope and trust that you will, even in your post-IAC lives, reach out to me if you have suggestions about the Commission's work.

Today's agenda consists of two panels, which should allow for broad discussions involving many Committee members. The first panel relates to fiduciary duty in different contexts. The Institute for the Fiduciary Standard has dubbed September "Fiduciary September," so the timing of this discussion is apt.[2] The fiduciary topic, though, is hot all year round. I look forward to hearing the panel's views on what this term means in the different contexts it is used, particularly in the provision of investment advice by SEC-registered advisers. As the Commission has explained, when the fiduciary standard applies, we are able to take a principles-based approach to regulation that allows an investment adviser latitude to use her own judgment in meeting the standard.[3] This principles-based approach is at the heart of the Investment Advisers Act.

The second panel concerns the relationship between shareholders and public companies. With respect to a shareholder's right to sue for a material misstatement or omission in a registration statement, a unanimous Supreme Court has spoken definitively regarding traceability, which is one subject of the panel.[4] Shareholder proposals are still very much a live issue, so I have a question for your consideration: How do we make sure that the voices of non-proposing shareholders are heard in conversations about shareholder proposal thresholds? This group of investors bears the bulk of the cost when companies spend time and management attention to deal with shareholder proposals. Non-proponent shareholders may not enjoy proportionate benefits. The proponent's motivation may derive not from her ownership of the company at issue, but from a concern that transcends (or is divorced from) that particular company. Thus, the benefits of her engagement with the company may not inure to the benefit of other shareholders.

Both panels have members with a variety of talents and views, representing practitioners, industry representatives, and theorists, all of which should lead to lively give-and-take. Thank you to Cristina Martin-Firvida, Danielle Specce, and the other dedicated staff in the Office of the Investor Advocate for making today's meeting possible.