BIO Applauds Reps. Sean Duffy and John Carney for Introducing the Corporate Governance Reform and Transparency Act
Bill would foster accountability, transparency and competition in proxy advisory firm industry
Washington, D.C. (May 25, 2016) – Today, the Biotechnology Innovation Organization (BIO) applauds Reps. Sean Duffy (R-WI) and John Carney (D-DE) for introducing the Corporate Governance Reform and Transparency Act.
The bill would require proxy advisory firms to be more transparent and open to input in their standard-setting process. It would also ensure that firms have the resources necessary to provide accurate recommendations on emerging companies as well as processes in place to manage potential conflicts of interest. Under the bill, firms would be encouraged to engage in a dialogue with the companies impacted by their recommendations.
The following statement may be attributed to BIO President & CEO Jim Greenwood:
“Emerging biotech companies on the public market operate in a unique industry that values a strong relationship with investors, yet they often are held by proxy advisory firms to one-size-fits-all standards that are not applicable to their business and are forced to engage in proxy fights over issues that do not add value for shareholders. These issues are exacerbated by the conflicts of interest inherent in some of the firms’ business models.
“BIO commends Reps. Duffy and Carney for introducing the Corporate Governance Reform and Transparency Act to enhance transparency and accountability in the proxy firm industry. This important legislation would allow growing biotech companies to focus on advancing their clinical research and achieving company growth that benefits both shareholders and patients.”
Since the JOBS Act became law four years ago, more than 190 biotechs have gone public as emerging growth companies (EGCs). BIO supports legislation, like the Corporate Governance Reform and Transparency Act, that supports these newly public companies by reducing roadblocks that divert company focus, time and funds to non-R&D distractions that can slow the development of groundbreaking medicines.
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