According to the DOL Inspector General, without additional transparency and tighter enforcement of proxy-voting requirements, publicly held companies could be pressured into accommodating political agendas that are detached from the economic interests of shareholders. Investors expect proxy advisors to make financially sound recommendations, but it now seems that ISS, the country’s largest proxy firm, is far too often putting the interests of Big Labor ahead of investors’ gains or security. Unions have increasingly turned to shareholder activism and proxy vote strategies for political and organizing leverage. And according to some financial blogs, ISS has the ability to sway 30 percent of the vote in any proxy battle and is very adept and skilled at getting “whatever it wants.” The Inspector General’s report found that economic benefit was not documented in 77% of the proxy votes studied. According to Bill Wilson of Americans for Limited Government, the Labor Department’s failure to act on the Inspector General’s study and basic recommendations shows “the Obama Administration is more interested in shilling for their political bosses at the AFL-CIO than protecting workers.”
