Dec. 27, 2019
Securities and Exchange Commission 100 F Street, NE Washington, DC 20549-0609 Re: File Number S7-22-19 December 27, 2019 Dear Commissioners: I consider myself well informed and community-minded and would like to thank and encourage the SEC in your reevaluation of the proxy advisory process. I am a private investor and an activist in and for my community in Duval County, Florida, and I believe speaking up on this issue could protect American investors large and small, even if they are unlikely to know it. By way of a quick introduction to Duval County: Duval County is one of the top ten most populous counties in Florida, at nearly one million people in our 918 square miles. We are home to Jacksonville, the most populous city in Florida and in the southeastern United States. The Atlantic Ocean borders us to the east and the St. Johns River—the longest river in Florida—runs north through the center of the county. Our topography is diverse, as are the needs and interests of those who call Duval County home. In July of this year, I was unanimously elected to chair the Taxation, Revenue, & Utilization of Expenditures (TRUE) Commission, which I have served on since 2017. My priority in this position is to advise Jacksonville decision-makers on the long-term viability of their financial decisions and to keep the public informed on issues related to the city’s budget and finances. Professionally, I've worked as a Corporate Paralegal for the past 4 years, with a primary focus in corporate governance. It is these advisory and professional roles that I want to make the case for the SEC’s increased regulation of the proxy advisory process and the advisory firms themselves. Most average investors have never heard of proxy advisory firms and could not tell you the role they play in any 401(k) scenario. But these are the players hired to reduce a fund or investment manager’s liability and they are in fact opening them up to greater liability by advising on proposals that champion ESG (environmental, social, and governance) policies over maximized fund returns. The investment manager is responsible for investing in such a way as to produce the greatest return possible for a pension fund or private investment portfolio. These managers are getting bad advice from the very firms they have outsourced this crucial role too. But who pays the ultimate price? The hardworking men and women who have put their money and their trust into retirement funds are counting on. The SEC is uniquely able to curtail the abuse of this system by the very players within it. Accountability to the investors should be sought by requiring proxy advisory firms to disclose their conflicts of interest when advising on proxy votes. Furthermore, the SEC should require these firms to make their vote recommendations with fiduciary responsibility in mind, thereby protecting the investors who have put their money and their faith in a process that supposedly simplifies a complicated system. In my experience as a first-generation American and a Haitian-American, there are a lot of assumptions generally held up as fact about what serves people. Certainly, making things easy for others has its place, and I recognize that this at the heart of the proxy system. The SEC can strike a balance in this open discussion between maintaining a system that does indeed make the details of investing and management easier for everyday investors while not allowing such investors to be steamrolled in the name of corporate governance. -- Most sincerely, Chairman Daniel Henry Duval County Democratic Party