Congressional Action on Securities Issues
in the 108^th Congress
Sarah Teslik, Executive Director, Council of Institutional Investors

With the imminent departure of SEC Chairman Harvey Pitt and the changes that occur at the beginning of a new Congress, don’t expect much action on regulations or legislation on investment and shareholder rights issues this year. That was the message from Sarah Teslik, who directs a leading group of public and corporate pension funds.

The SEC may address regulations concerning how organizations handle proxy votes, she said. Under current law mutual funds must disclose how they voted their proxies. However, the Office of the Comptroller of the Currency is considering a new rule that would require banks to do the same.

Teslik suggested that there is a fundamental flaw in the way publicly-traded companies pick board members. Typically a CEO selects board candidates, who are then routinely approved by shareholders. She believes the solution is to have organizations like pension funds nominate a short slate of candidates for board vacancies. Currently such nominations are possible, but the process is lengthy, difficult and encourages litigation by entities that might oppose an organization’s nominees.

Teslik noted that one of the more important pieces of legislation Congress approved last year was the Sarbanes-Oxley bill. She does not expect Congress to address a technical corrections act in this Congress, although such a bill might be expected after passage of such a large and complex law as Sarbanes-Oxley.

Teslik is executive director of the Council of Institutional Investors, an organization of over 100 public, corporate and Taft-Hartley pension funds that seeks to address investment issues affecting the size or security of its members’ $1.3 trillion in assets.