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In recent years, the Securities and Exchange Commission has moved away from its charter to “facilitate capital formation, protect investors and maintain efficient markets”—but it can return to its original mission by adopting a series of reforms suggested by the NAM.

What’s going on: Following the SEC’s recent release of an updated regulatory agenda, the NAM submitted a 23-page letter with detailed recommendations for rightsizing regulatory burdens and supporting capital formation for manufacturers.

• Over the next six months, the SEC plans to propose rulemakings on shareholder proposal modernization, the simplification of filer status for reporting companies and the rationalization of disclosure practices.
• The NAM made specific recommendations for those rulemakings and suggested additional reforms for the SEC to consider.

What we said: To foster “growth at companies of all sizes,” the NAM suggested the SEC should adopt reforms to:

• Promote capital formation and improve the regulatory environment for IPO companies and smaller manufacturers, including a reduction in Sarbanes-Oxley Act audit attestation burdens;
• Depoliticize the shareholder proposal process by allowing the exclusion of environmental, social and political proposals unless they are material to a company;
• Provide meaningful oversight of proxy advisory firms, which continue to exercise outsized influence over public companies and their shareholders—despite the firms’ inflexible policies, lack of transparency and glaring conflicts of interest;
• Increase ownership transparency to improve investor outreach by public companies; and
• Consider additional changes to existing rules, including rescinding stringent rules on the reporting of cybersecurity incidents, scaling back conflict minerals disclosure requirements and modernizing executive compensation rules.

Why it’s important: Taking these steps will “prioritize capital formation and create a more hospitable environment for public companies,” the NAM told the SEC.