1. meaningful corporate governance reforms (including proxy access, majority voting and “say on pay”);
2. an independent Consumer Financial Protection Agency; and
3. self-funding of the Securities and Exchange Commission.

With nearly 400 members, SIF is the U.S. national nonprofit membership association for professionals, firms and organizations dedicated to advancing the practice and growth of socially responsible and sustainable investing.

The letter from Social Investment Forum CEO Lisa Woll to the full membership of the U.S. Senate Committee on Banking, Housing and Urban Development stated:  “Of all of the changes Congress can enact, instilling good governance among U.S. companies should be a top priority.  Corporate governance reforms do not cost the American taxpayer a dime, and they help the SEC and other regulators do their jobs more effectively by providing greater oversight of corporations and accountability in the boardroom.”

The SIF letter stresses the need for action on corporate governance in three areas:  proxy access, a majority voting standard, and the annual advisory vote on executive compensation, also known as “Say on Pay.”

“It is our belief that the recent financial crisis has proven beyond a doubt that the United States needs an effective regulator to protect consumers from predatory lending and to ensure that all Americans have adequate access to capital to start small businesses and buy homes,” said Cheryl Smith, SIF board chair and president and senior portfolio manager at Trillium Asset Management. 

“While we acknowledge that personal responsibility played a role in American homebuyers taking on mortgages and consumer debt they could not in the end afford, it is unnecessarily difficult for American families to make sound financial decisions, because the paperwork associated with credit cards, mortgages, checking accounts and other consumer financial products is filled with reams of overly-complicated fine print and technical language,” she added.  “In addition to limiting predatory practices that too often target low-income and minority communities, it is important that Congress ensure that these communities continue to have access to capital.”  SIF believes an independent CFPA will achieve these goals.

On the issue of SEC self-funding, SIF has indicated to Congress that the enforcement tasks before the SEC have become ever more daunting, and the agency has not been adequately funded in more than a decade.  The SEC already generates enough revenues to cover its costs through filing fees, but it is only allowed to spend roughly half of these funds to protect investors.  If the SEC is to become an effective regulator, it requires sufficient, stable long-term funding that will enable it to hire experts needed to police ever more sophisticated and complicated financial markets and to respond swiftly and effectively to market events through increased staffing and technology developments.

Woll concluded, “It is essential that a strong financial reform package emerges from the Senate—one the socially responsible and sustainable investing community can support and does not allow business as usual to continue.”

Read the full text of the SIF letter.