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Jonathan Macey

Behind the SEC’s War on Freedom of Speech

Its new regulations would limit the information that shareholders are entitled to.

Free speech stops here.

Free speech stops here.

Photographer: Zach Gibson/Bloomberg

Modern investors have diversified portfolios with stakes in hundreds – sometimes thousands – of companies. Proxy advisory firms provide these investors with objective, unbiased recommendations about how they should exercise the voting rights tied to their shares.

The largest proxy advisory firms generally side with the management of the companies. But they will take an opposing side if company directors are not fulfilling their oversight responsibilities or if the managers try to entrench themselves in their jobs by adopting scorched-earth anti-takeover devices.