Minutes of the Meeting on July 14, 2016

The Investor Advisory Committee (IAC) met on July 14, 2016, in a public meeting at the Securities and Exchange Commission’s headquarters in Washington, D.C.  The meeting convened at 10:00 a.m. and was broadcast live by webcast.

The following persons participated in the meeting:

Commissioners of the Securities and Exchange Commission

• Chair Mary Jo White
• Commissioner Kara Stein
• Commissioner Michael Piwowar

Advisory Committee Members[1]

• Kurt Schacht, Chairman
• Anne Sheehan, Vice Chairman (morning only, by phone)
• Joseph V. Carcello
• John Coates (by phone)
• Rick Fleming
• Matthew Furman
• Craig Goettsch
• Stephen Holmes
• William D. Lee
• Barbara Roper
• Damon Silvers
• Susan Wyderko

Opening Remarks

Chairman Kurt Schacht opened the meeting by welcoming three new members to the IAC:  John Coates, Nancy LeaMond, and Elisse Walter.  Chair White welcomed the new members and provided an update on the Commission’s activities in recent months.  Commissioners Piwowar and Stein also welcomed new members and commented on the agenda topics. 

Approval of Minutes for Meetings on April 14 and June 7, 2016
The Committee voted to approve the minutes of its public in-person meeting on April 14, 2016, and its telephonic meeting on June 7, 2016.  The votes took place after motions were made and seconded.

Discussion of the State of Sustainability Reporting 

Mr. Schacht introduced the topic and the five panelists: 

• Daniel Goelzer, Senior Counsel/Retired Partner, Baker & McKenzie
  
• Christianna Wood, Chair of the Board, Global Reporting Initiative (GRI)
  
• Jean Rogers, CEO and Founder, Sustainability Accounting Standards Board (SASB)
  
• Lisa French, Chief Technical Officer, International Integrated Reporting Council (IIRC)
  
• Christoph A. Pereira, Vice President, Chief Corporate, Securities & Finance Counsel and General Counsel, Business Innovations, General Electric Company
  

The panelists delivered opening remarks.  Mr. Goelzer provided an overview of the Commission's traditional approach to sustainability reporting and suggested how the Commission should proceed in this area.  Ms. Wood summarized the 20-year history of GRI and current usage of its reporting framework by companies around the world. Ms. Rogers described the work of SASB, which was founded in 2011, and argued for the need for industry-based sustainability disclosure standards.  Ms. French described the IIRC and the role of the international integrated reporting framework, which encompassed sustainability as just one of several disclosure factors.  Mr. Pereira described GE’s approach, including its integrated summary report.

A discussion ensued, in which Chair White and Committee members participated.

RECESS 

The Committee went into recess at 12:06 p.m. for lunch and non-public subcommittee meetings.

AFTERNOON SESSION

The public meeting resumed after 1:30 p.m. 

Discussion Regarding Investment Company Reporting Modernization

Ms. Roper introduced the topic, which focused on a Rule of the then-proposed Investment Company Reporting Modernization Rule.  The Rule (30e-3) as then drafted would have allowed mutual fund companies to shift the default for delivery of annual and semiannual shareholder reports from mailed paper documents to electronic delivery. 

Ms. Roper introduced the three panelists: 

• Linda Sherry, Director, National Priorities, Consumer Action
• David Blass, General Counsel, Investment Company Institute
• Robert Schifellite, President, Investor Communication Services, Broadridge Financial Solutions, Inc.

The panelists delivered opening remarks.  Ms. Sherry expressed her organization’s opposition to a shift to a default electronic delivery for shareholder reports.  Mr. Blass explained ICI’s support for such a shift.  In addition, he raised the issue of how delivery fees are set and regulated.  Mr. Schifellite described Broadridge’s efforts to encourage the take-up of e-delivery without disenfranchising shareholders. A discussion with Committee members ensued.

Closing

The meeting was adjourned shortly after 3 p.m.