SEC Strategic Plan

SEC Strategic Plan & Main Street Coalition Ignore Governance

SEC Strategic Plan

SEC Strategic Plan focuses on helping “Main Street“make “informed investment decisions.” Little or no attention is paid in the draft Plan to helping us make informed governance decisions.

The SEC seeks comments at Here is my initial response. I will follow with more thorough comments and hope you will share your thoughts and submissions with me.

While I appreciate the 2018-2022 Draft Strategic Plan’s focus on helping Main Street investors make “informed investment decisions,” there is nothing on our role in governing the companies we own. The SEC has done nothing to promote dissemination of discussions and analysis of corporate governance issues to retail shareholders and mutual fund investors.

In fact, the SEC played a key role in the demise of, which allowed retail shareholders to vote proxies in a way similar to how institutional investors vote. One of the only free resources focused on proxy voting for Main Street investors is but it is hanging on by a thread.

The SEC’s Strategic Plan to focus on helping investors make informed investment decisions is like helping parents decide on which country their baby should be born in. What about helping children be proper citizens?

The role of an investor does not end once an investment is made. Each investor has a right to help govern the companies they own a part of. While the SEC has done a relatively good job of protecting the governance rights of Main Street investors, it has done little or nothing to help the average investor to be an informed shareholder when it comes to voting their proxies or other such governance activities.

SEC Strategic Plan Shaped by Main Street Coalition?

How did we get to the point where the SEC is focused on protecting shareholders as consumers of investment instruments, instead of as corporate citizens, helping govern their own companies? The “public interest” group, Main Street Investors Coalition, wants retail investors to rise up and demand that fund managers focus on “maximizing performance – not playing politics with other people’s money.”

Nell Minow has critiqued the Coalition. I hope to write something on their efforts in the coming months. In the battle between financialization of the economy by Wall Street, versus the interests of Main Street, I will side with Main Street. However, as Minow points out, there is very little representation of Main Street, if any, in the Coalition.

The SEC’s Strategic Plan and the Coalition’s pronouncements elevate “maximum shareholder return” to an everyday duty by corporations and funds, whereas legally that duty comes into play primarily when a company is on the auction block.

SEC Strategic Plan: Values Central

Investors are told to leave our values at the door when entering the world of investing. Many corporate executives drank the same Koolaide. Those executives think they have a fiduciary duty to take advantage of every business opportunity to make a profit, including concentration camps to separate children from their parents. (Defense Contractors Cashing In On Immigrant Kids’ Detention)

Contrary to what many economists are taught in university, morality is not outside the field of economics but is central to it (The Theory of Moral Sentiments). We bring our values to everything we do. If we own stock in companies profiting from immoral activities, we have a moral duty, both as citizens and as stockholders, to vote for change.

We need a coalition of public opinion and responsible investors to get the SEC to help us find and/or develop the resources needed to govern corporations interest of both long-term shareholders and the public.

SEC Strategic Plan: See also


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2 Responses to SEC Strategic Plan & Main Street Coalition Ignore Governance

  1. Alexander J. Davie 07/02/2018 at 6:59 pm #

    I think one thing the SEC and most retail investors have yet to understand, which is completely supported by statistical analysis, is that most investors are just terrible stock pickers to begin with. Indeed, Howard Markowitz won a Nobel prize showing the math behind stock picking and coming up with modern portfolio theory, which is why I only own between 5 to 7 ETFs and that’s it. It shouldn’t be the SEC’s strategy to police companies disclosures when Nobel prize winning of asset allocation is free and open to anyone.

    • James McRitchie 07/02/2018 at 9:40 pm #

      More difficult than picking for most investors I know is then leaving it alone… not buying and selling like gaming, but buying and holding. While holding, get involved in governing the company and making it better.

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