READ ALL ABOUT IT! ShareOwners.org Goes Live With Major U.S. Investor Survey
SHAREOWNERS.ORG SURVEY: U.S. INVESTORS DEMANDING STRONG FINANCIAL MARKET REFORMS, MORE THAN A THIRD ARE “ANGRY” TODAY
In Response, Powerful New Social Networking Campaign Launched Today to Give Voice To “Powerless” Investors; 3 Out of 5 Investors Say They Are Now Less Confident in Market Fairness.
WASHINGTON, D.C.///June 25, 2009///More than three out of four American investors (79 percent) want to “see strong action taken to correct the problems that exist today” in the financial markets, including over a third (34 percent) who are “angry” about the debacle on Wall Street and the related failure of regulatory oversight, according to a major new survey of 1,256 U.S. investors conducted by Opinion Research Corporation (ORC) on behalf of ShareOwners.org (http://www.ShareOwners.org), a new nonprofit and nonpartisan organization that will educate and organize U.S. investors to support both short- and long-term financial market reforms.
The release of the new ShareOwners.org survey -- which also reveals that about three out of five investors (58 percent) are “less confident in the fairness of the financial markets” today than they were one year ago – marks the public launch of ShareOwners.org’s powerful new Ning-based social networking campaign modeled on the same technology that transformed the 2008 presidential election process.
The need and potential for the ShareOwners.org is apparent in the survey findings that: (1) more than half of American investors (52 percent) say “more information and online education about your rights and duties as a shareholder” would make them more confident about the fairness of the financial markets; and (2) nearly one in five investors (17 percent or 24 million Americans) who would “consider becoming involved in a group to protect the rights and interests of shareholders or investors like you.” (See additional survey findings below.)
As a first step, ShareOwners.org will engage typical American investors by sending their comments in support of the group’s agenda directly to their members of Congress. For the long run, ShareOwners.org’s broad four-part agenda focuses on the need for stronger regulation (including a beefed-up SEC), increased accountability of boards/CEOs, improved financial transparency and protection of the legal rights of investors. (See details below.)
ShareOwners.org Chairman Richard Ferlauto, director of corporate governance and pension investment, American Federation of State, County and Municipal Employees (AFSCME) said: “As of today, the average American investor has a way to weigh in on and be heard about needed financial markets reforms. The severe losses suffered by tens of millions of Americans in their 401(k)s, mutual funds, traditional pension plans and other investments all point to the need for a new emphasis on shareowner rights and meaningful regulation in order to ensure the financial security of American families. Unfortunately, the shareowners in America’s corporations and mutual funds have limited options today when it comes to protecting themselves from weak and ineffectual boards dominated by management, misinformation peddled as fact, accounting manipulation, and other abuses. Our goal is to level the playing field by giving a powerful new voice to the people who comprise the ‘silent majority’ in the investment world.”
Barbara Roper, director of investor protection, Consumer Federation of America, said: “Investors are understandably angry, and they are demanding action. With the global economy having been brought to the brink of collapse and taxpayers forced to bear the costs of Wall Street’s excesses, it is imperative that Congress and the administration finally stand up to the big banks and deliver the real reform that investors deserve and the economy desperately needs.”
Nell Minow, editor-in-chief, The Corporate Library, a leading corporate governance research firm, said: “The meltdown of the financial markets has made it indisputably clear that investors need a better understanding of investment risk both in public companies and in intermediaries like mutual funds and a more effective way to exercise oversight on issues like excessive compensation and ineffective boards. I am delighted that some of the penalties imposed on companies in the last round of corporate scandals is being used to give investors the tools they need to become more knowledgeable and effective shareholders.”
The suggested letter text for investors to send to Congress on the ShareOwners.org site reads, in part: “As an investor and your constituent, I am adding my voice today in support of the ShareOwners.org’s agenda to restore order to our financial marketplace and to clean up Wall Street abuses. I can tell you that investor confidence in Wall Street and those who regulate it will not be fully restored until there are better protections in place for the average American investor. You need to understand that, from my perspective, the system is broken today. The unacceptable result is that the long-term savings and investments of my families and others are needlessly jeopardized.”
Among the major advisors to ShareOwners.org are the following individuals: Lynn E. Turner, former chief accountant at the U.S. Securities and Exchange Commission and an investor representative on the Public Companies Accounting Oversight Board Standards Advisory Group and the Financial Accounting Standards Board’s (FASB) Investor Technical Advisory Committee; John Wilcox, chairman, Sodali Ltd., and former senior vice president of corporate governance, TIAA-CREF; and Dr. Teresa Ghilarducci, director, Schwartz Center for Economic Policy Analysis, The New School for Social Research.
ShareOwners.org is receiving its initial funding from a court settlement and the Lens Foundation for Corporate Governance.
SHAREOWNERS.ORG AGENDA
The four-part ShareOwners.org agenda is spelled out in detail on the Web and may be summarized as follows:
* Stronger regulation of the markets through a beefing up the Securities and Exchange Commission (SEC), ensuring that it has the resources and authority to increase supervision and enforcement of financial professionals, hedge funds, and mutual funds, and also forfeiture of compensation and bonuses earned by management in a deceptive fashion, strengthening state-level shareowner rights, and protecting whistleblowers and confidential sources who expose financial fraud and other corporate misconduct.
* Increased accountability of boards and corporate executives by allowing shareowners to vote on the pay of CEOs and other top executives, empowering shareowners to more easily nominate directors for election on corporate boards, requiring majority election of all members of corporate boards at American companies, splitting the roles of chairman of the board and CEO at major companies, stopping the practice of brokers casting votes for shareowners in board elections, and allowing shareowners to call special meetings.
* Improved financial transparency, including a crackdown on corporate disclosure abuses used to manipulate stock prices, strengthening corporate disclosures so that shareowners can better understand long-term risks, and protecting U.S. shareowners by promoting new international accounting standards.
* Enhanced protection of the legal rights of defrauded shareowners, which means preserving the right of investors to go to court to get justice, ensuring that those who play a role in committing frauds bear their share of the cost for cleaning up the mess, and allowing state courts to help protect investor rights.
MORE KEY SURVEY FINDINGS
Graham Hueber, senior researcher, Opinion Research Corporation International, said: “American investors clearly want to see tough action taken soon by Congress to reform how our financial markets work and also to clean up abuses on Wall Street. Support for such action is strong across all groups by age, income, educational achievement and political affiliation. It is particularly noteworthy that such a high percentage of investors – 34 percent – would use a term as strong as ‘angry’ to describe their views about the need for such action. And, even though they are not angry the additional nearly half of other investors (45 percent) who want to see strong clean-up action taken should send an unmistakable message to policy makers. This is particularly true when you look at that data alongside the finding that nearly six out of 10 investors (57 percent) said that strong federal action would help to restore their lost confidence in the fairness of the markets.”
The ORC scientific survey for ShareOwners.org of 1,256 U.S. investors answers the following questions:
* What stronger investment-related laws and rules do investors want to see? “Much stronger” or “somewhat stronger” rules and laws are favored for:
o “Laws governing stock market fraud and abuse” (89 percent).
o “The legal rights of investors who have lost money due to fraud and abuse” (85 percent).
o “The ability of shareholders to influence the play of CEOs and other top management” (77 percent).
o “Powers of the SEC and other stock market regulators” (72 percent). More than four out of five self-identified “angry” investors (81 percent) want to see a stronger SEC.
o “The ability of shareholders to put issues to a vote by other shareholders” (71 percent).
* Would meaningful reforms actually boost investor confidence? About six in 10 American investors (57 percent) say that “strong federal legislation to protect the rights of shareholders and other investors” would make them more confident about the fairness of the financial markets. The confidence-building effect here peaks among self-identified angry investors (68 percent), less-confident investors (60 percent), those age 65+ (62 percent), African Americans (61 percent), women (61 percent), and Hispanics (58 percent).
* What do Americans think about key reforms?
o More than four out of five American investors (83 percent) agree that “shareholders should be permitted to be actively involved in CEO pay and other important issues that may bear on the long-term value of a company to their retirement portfolio or other fund.” Only 15 percent think that “a company's board of directors along with the CEO and other top management should be allowed to run companies as they see fit with little or no input from shareholders.”
o More than four out of five investors (82 percent) agree that “shareholders should have the ability to nominate and elect directors of their own choosing to the boards of the companies they own.” Only 16 percent of Americans say that “shareholders should NOT be able to propose directors to sit on the boards of the companies they own.”
o Nearly nine out of 10 investors (87 percent) say that “investors who lose their retirement savings due to fraud and abuse should have the right to go to court if necessary to recover those funds.” Only 1 in 10 American investors think that “investor lawsuits clog up the courts and make it more expensive for companies to run their businesses.”
* What are the major causes of reduced investor confidence? Among the 58 percent of investors who now less confident:
o The No. 1 reason for loss of investor confidence in the markets: “overpaid CEOs and/or unresponsive management and boards” at (81 percent).
o The No. 2 reason for loss of investor confidence in the markets: “reports of stock market fraud and abuse” at (74 percent).
o The No. 3 reason for loss of investor confidence in the markets: “failure of stock market regulators” at (68 percent).
o The No. 4 reason for loss of investor confidence in the markets: “decline in your portfolio or retirement fund” (60 percent).
* Who do investors blame the most? Investors are most likely to name “corporate directors who failed to do their job” (91 percent) as the party “most responsible for the current meltdown in the financial markets.” The balance of the identified parties were “greedy CEOs” (89 percent), financial regulators (88 percent) and "deregulation of the banks" (82 percent).
* Who are angry investors? The 35 percent of investors who say they are “angry” today and wanting action on reform are more likely than other investors to be white, have household incomes of $50,000 or more, live in a metropolitan area, have a college degree, own their home, be married, be employed full time in a white collar occupation, and be the head of their household. Anger among investors peaks among Democrats/those leaning Democratic (49 percent, in contrast to 38 percent of Republicans/those leaning Republican), those aged 55-64 (42 percent) and 65+ (40 percent).
* Are investors really prepared to learn more? More than half of investors (56 percent) say they would not be an active member of a group but want to “learn more about being a smart shareholder or investor”. Much education of shareowners remains to be done: While half of American investors (50 percent) say they have voted on a proxy issue one or more times, nearly a quarter (22 percent) say they “have no idea what a ‘proxy statement’ is." Another 16 percent have considered voting on a proxy issue, but have not yet done so and 12 percent say they have never cast such a vote and do not intend to.
For full survey findings and methodology, go to http://www.ShareOwners.org.
CONTACT: Patrick Mitchell, (703) 276-3266 or pmitchell (at) hastingsgroup.com.
EDITOR’S NOTE: A streaming audio replay of the news event will be available on the Web at http://www.ShareOwners.org as of 3 p.m. EDT on June 25, 2009.
In Response, Powerful New Social Networking Campaign Launched Today to Give Voice To “Powerless” Investors; 3 Out of 5 Investors Say They Are Now Less Confident in Market Fairness.
WASHINGTON, D.C.///June 25, 2009///More than three out of four American investors (79 percent) want to “see strong action taken to correct the problems that exist today” in the financial markets, including over a third (34 percent) who are “angry” about the debacle on Wall Street and the related failure of regulatory oversight, according to a major new survey of 1,256 U.S. investors conducted by Opinion Research Corporation (ORC) on behalf of ShareOwners.org (http://www.ShareOwners.org), a new nonprofit and nonpartisan organization that will educate and organize U.S. investors to support both short- and long-term financial market reforms.
The release of the new ShareOwners.org survey -- which also reveals that about three out of five investors (58 percent) are “less confident in the fairness of the financial markets” today than they were one year ago – marks the public launch of ShareOwners.org’s powerful new Ning-based social networking campaign modeled on the same technology that transformed the 2008 presidential election process.
The need and potential for the ShareOwners.org is apparent in the survey findings that: (1) more than half of American investors (52 percent) say “more information and online education about your rights and duties as a shareholder” would make them more confident about the fairness of the financial markets; and (2) nearly one in five investors (17 percent or 24 million Americans) who would “consider becoming involved in a group to protect the rights and interests of shareholders or investors like you.” (See additional survey findings below.)
As a first step, ShareOwners.org will engage typical American investors by sending their comments in support of the group’s agenda directly to their members of Congress. For the long run, ShareOwners.org’s broad four-part agenda focuses on the need for stronger regulation (including a beefed-up SEC), increased accountability of boards/CEOs, improved financial transparency and protection of the legal rights of investors. (See details below.)
ShareOwners.org Chairman Richard Ferlauto, director of corporate governance and pension investment, American Federation of State, County and Municipal Employees (AFSCME) said: “As of today, the average American investor has a way to weigh in on and be heard about needed financial markets reforms. The severe losses suffered by tens of millions of Americans in their 401(k)s, mutual funds, traditional pension plans and other investments all point to the need for a new emphasis on shareowner rights and meaningful regulation in order to ensure the financial security of American families. Unfortunately, the shareowners in America’s corporations and mutual funds have limited options today when it comes to protecting themselves from weak and ineffectual boards dominated by management, misinformation peddled as fact, accounting manipulation, and other abuses. Our goal is to level the playing field by giving a powerful new voice to the people who comprise the ‘silent majority’ in the investment world.”
Barbara Roper, director of investor protection, Consumer Federation of America, said: “Investors are understandably angry, and they are demanding action. With the global economy having been brought to the brink of collapse and taxpayers forced to bear the costs of Wall Street’s excesses, it is imperative that Congress and the administration finally stand up to the big banks and deliver the real reform that investors deserve and the economy desperately needs.”
Nell Minow, editor-in-chief, The Corporate Library, a leading corporate governance research firm, said: “The meltdown of the financial markets has made it indisputably clear that investors need a better understanding of investment risk both in public companies and in intermediaries like mutual funds and a more effective way to exercise oversight on issues like excessive compensation and ineffective boards. I am delighted that some of the penalties imposed on companies in the last round of corporate scandals is being used to give investors the tools they need to become more knowledgeable and effective shareholders.”
The suggested letter text for investors to send to Congress on the ShareOwners.org site reads, in part: “As an investor and your constituent, I am adding my voice today in support of the ShareOwners.org’s agenda to restore order to our financial marketplace and to clean up Wall Street abuses. I can tell you that investor confidence in Wall Street and those who regulate it will not be fully restored until there are better protections in place for the average American investor. You need to understand that, from my perspective, the system is broken today. The unacceptable result is that the long-term savings and investments of my families and others are needlessly jeopardized.”
Among the major advisors to ShareOwners.org are the following individuals: Lynn E. Turner, former chief accountant at the U.S. Securities and Exchange Commission and an investor representative on the Public Companies Accounting Oversight Board Standards Advisory Group and the Financial Accounting Standards Board’s (FASB) Investor Technical Advisory Committee; John Wilcox, chairman, Sodali Ltd., and former senior vice president of corporate governance, TIAA-CREF; and Dr. Teresa Ghilarducci, director, Schwartz Center for Economic Policy Analysis, The New School for Social Research.
ShareOwners.org is receiving its initial funding from a court settlement and the Lens Foundation for Corporate Governance.
SHAREOWNERS.ORG AGENDA
The four-part ShareOwners.org agenda is spelled out in detail on the Web and may be summarized as follows:
* Stronger regulation of the markets through a beefing up the Securities and Exchange Commission (SEC), ensuring that it has the resources and authority to increase supervision and enforcement of financial professionals, hedge funds, and mutual funds, and also forfeiture of compensation and bonuses earned by management in a deceptive fashion, strengthening state-level shareowner rights, and protecting whistleblowers and confidential sources who expose financial fraud and other corporate misconduct.
* Increased accountability of boards and corporate executives by allowing shareowners to vote on the pay of CEOs and other top executives, empowering shareowners to more easily nominate directors for election on corporate boards, requiring majority election of all members of corporate boards at American companies, splitting the roles of chairman of the board and CEO at major companies, stopping the practice of brokers casting votes for shareowners in board elections, and allowing shareowners to call special meetings.
* Improved financial transparency, including a crackdown on corporate disclosure abuses used to manipulate stock prices, strengthening corporate disclosures so that shareowners can better understand long-term risks, and protecting U.S. shareowners by promoting new international accounting standards.
* Enhanced protection of the legal rights of defrauded shareowners, which means preserving the right of investors to go to court to get justice, ensuring that those who play a role in committing frauds bear their share of the cost for cleaning up the mess, and allowing state courts to help protect investor rights.
MORE KEY SURVEY FINDINGS
Graham Hueber, senior researcher, Opinion Research Corporation International, said: “American investors clearly want to see tough action taken soon by Congress to reform how our financial markets work and also to clean up abuses on Wall Street. Support for such action is strong across all groups by age, income, educational achievement and political affiliation. It is particularly noteworthy that such a high percentage of investors – 34 percent – would use a term as strong as ‘angry’ to describe their views about the need for such action. And, even though they are not angry the additional nearly half of other investors (45 percent) who want to see strong clean-up action taken should send an unmistakable message to policy makers. This is particularly true when you look at that data alongside the finding that nearly six out of 10 investors (57 percent) said that strong federal action would help to restore their lost confidence in the fairness of the markets.”
The ORC scientific survey for ShareOwners.org of 1,256 U.S. investors answers the following questions:
* What stronger investment-related laws and rules do investors want to see? “Much stronger” or “somewhat stronger” rules and laws are favored for:
o “Laws governing stock market fraud and abuse” (89 percent).
o “The legal rights of investors who have lost money due to fraud and abuse” (85 percent).
o “The ability of shareholders to influence the play of CEOs and other top management” (77 percent).
o “Powers of the SEC and other stock market regulators” (72 percent). More than four out of five self-identified “angry” investors (81 percent) want to see a stronger SEC.
o “The ability of shareholders to put issues to a vote by other shareholders” (71 percent).
* Would meaningful reforms actually boost investor confidence? About six in 10 American investors (57 percent) say that “strong federal legislation to protect the rights of shareholders and other investors” would make them more confident about the fairness of the financial markets. The confidence-building effect here peaks among self-identified angry investors (68 percent), less-confident investors (60 percent), those age 65+ (62 percent), African Americans (61 percent), women (61 percent), and Hispanics (58 percent).
* What do Americans think about key reforms?
o More than four out of five American investors (83 percent) agree that “shareholders should be permitted to be actively involved in CEO pay and other important issues that may bear on the long-term value of a company to their retirement portfolio or other fund.” Only 15 percent think that “a company's board of directors along with the CEO and other top management should be allowed to run companies as they see fit with little or no input from shareholders.”
o More than four out of five investors (82 percent) agree that “shareholders should have the ability to nominate and elect directors of their own choosing to the boards of the companies they own.” Only 16 percent of Americans say that “shareholders should NOT be able to propose directors to sit on the boards of the companies they own.”
o Nearly nine out of 10 investors (87 percent) say that “investors who lose their retirement savings due to fraud and abuse should have the right to go to court if necessary to recover those funds.” Only 1 in 10 American investors think that “investor lawsuits clog up the courts and make it more expensive for companies to run their businesses.”
* What are the major causes of reduced investor confidence? Among the 58 percent of investors who now less confident:
o The No. 1 reason for loss of investor confidence in the markets: “overpaid CEOs and/or unresponsive management and boards” at (81 percent).
o The No. 2 reason for loss of investor confidence in the markets: “reports of stock market fraud and abuse” at (74 percent).
o The No. 3 reason for loss of investor confidence in the markets: “failure of stock market regulators” at (68 percent).
o The No. 4 reason for loss of investor confidence in the markets: “decline in your portfolio or retirement fund” (60 percent).
* Who do investors blame the most? Investors are most likely to name “corporate directors who failed to do their job” (91 percent) as the party “most responsible for the current meltdown in the financial markets.” The balance of the identified parties were “greedy CEOs” (89 percent), financial regulators (88 percent) and "deregulation of the banks" (82 percent).
* Who are angry investors? The 35 percent of investors who say they are “angry” today and wanting action on reform are more likely than other investors to be white, have household incomes of $50,000 or more, live in a metropolitan area, have a college degree, own their home, be married, be employed full time in a white collar occupation, and be the head of their household. Anger among investors peaks among Democrats/those leaning Democratic (49 percent, in contrast to 38 percent of Republicans/those leaning Republican), those aged 55-64 (42 percent) and 65+ (40 percent).
* Are investors really prepared to learn more? More than half of investors (56 percent) say they would not be an active member of a group but want to “learn more about being a smart shareholder or investor”. Much education of shareowners remains to be done: While half of American investors (50 percent) say they have voted on a proxy issue one or more times, nearly a quarter (22 percent) say they “have no idea what a ‘proxy statement’ is." Another 16 percent have considered voting on a proxy issue, but have not yet done so and 12 percent say they have never cast such a vote and do not intend to.
For full survey findings and methodology, go to http://www.ShareOwners.org.
CONTACT: Patrick Mitchell, (703) 276-3266 or pmitchell (at) hastingsgroup.com.
EDITOR’S NOTE: A streaming audio replay of the news event will be available on the Web at http://www.ShareOwners.org as of 3 p.m. EDT on June 25, 2009.
Comment
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Comment by Scott Stapf on June 25, 2009 at 10:47am - Direct links to survey report and streaming audio -- with latter available later today -- are at http://shareownersonline.ning.com/page/get-the-news.
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