US - Institutional investors have written to the White House expressing their concern over an amendment to the Wall Street reform bill.
A measure introduced by the Senate, reportedly at the behest of the White House, only allows shareholders owning at least 5% of a company for more than two years to nominate board directors on corporate proxies.
The International Corporate Governance Network, which represents global investors worldwide with assets of US9.5trn, has written to White House adviser Valerie Jarrett to express its concern over what they describe as a restriction of shareholder rights.
"We believe this would be extremely detrimental to the attractiveness of the US market from overseas investors and would represent a backward step for US corporate governance," the group said in the letter, which was copied to Congressman Barney Frank and Senate Banking Committee chairman Christopher Dodd.
The group urges these restrictions be watered down, suggesting an ownership threshold of 3% for all companies, in particular those with market caps greater than US$10bn.
"International experience of shareholder access to the proxy suggests that such rights are used responsibly and constructively," the letter says.
"Given that international investors now own close to one fifth of the share capital of US listed companies, their experience may well provide some comfort to those concerned about how greater access would work."
The letter follows an outcry last week from the Council of Institutional Investors, which represents public, union and corporate pension funds.
It urged its members to contact House and Senate negotiators immediately to persuade them to abandon this "harmful" proposal on proxy access.
"A 5% ownership requirement would effectively shut out those large, long-term institutional investors-largely public and union pension funds-most willing to engage companies and hold corporate boards accountable," the CII said.
Lawmakers hope to reconcile the Senate's bill with the House of Representative's version before US President Barack Obama heads to Toronto on Friday for the G20 summit of world leaders.
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