Press Release

McHenry: It’s Time to Get Politics out of Corporate Boardrooms

WASHINGTON — Today, the House Financial Services Committee, led by Congressman Patrick McHenry (NC-10), is holding a hearing to examine environmental, social, and governance (ESG) policy in financial regulation. Republicans are fighting to protect everyday investors with proposals to reform the proxy voting system, promote accountability in the proxy advisory system, and address the Biden Administration's weaponization of financial regulators to push climate and social goals.

Watch Congressman McHenry’s opening remarks here.

Read Congressman McHenry’s opening remarks as prepared for delivery:

“We are here today to ensure U.S. markets remain healthy, vibrant, and the envy of the world.

“This year, our Committee has found bipartisan agreement on solutions to strengthen our public markets and increase opportunities for all investors.

“I hope we can continue that constructive work today.

“Unfortunately, we have seen a disturbing trend in the Biden Administration’s approach to regulating our capital markets—particularly at the Securities and Exchange Commission.

“Rather than focusing on sound financial regulation, the SEC has turned its attention towards non-material environmental, social, and political issues.

“This misguided approach has led to increased costs and burdens for those participating in the U.S. public markets.

“These politically motivated regulations not only discourage private companies from going public but also hinder the competitiveness of American public companies.

“The everyday investors, who rely on financial returns for their retirement savings, bear the brunt of these consequences.

“Today we will discuss a slate of proposals that provide commonsense solutions to strengthen our public markets. To be clear, these are not simply messaging bills, they will make meaningful changes to protect investors and ensure our markets remain robust and competitive.

“First, we must make necessary reforms to the proxy process to restore its efficiency in promoting long-term shareholder value.

“We must prevent shareholder activism from diverting attention and resources away from the core issues at hand.

“To be clear: I support shareholder democracy. But it should be their say, not external third parties who exploit the existing process to impose their own social and political beliefs onto American public companies.

“This undermines the very principles of democracy and transforms corporate boardrooms into political platforms, overshadowing sound financial decision-making. Ultimately, this harms everyday investors and our public markets.

“Second, we must address the burdensome climate reporting and other requirements imposed by the Biden Administration.

“The SEC has proposed a 500-page climate disclosure rule that would replace voluntary sustainability reports with mandatory disclosures.

“This includes demanding detailed emissions data and climate risk management strategies, even when that information is not material. The SEC is not a climate regulator nor has Congress authorized it to mandate environmental policy via the disclosure regime.

“In fact, Republicans have consistently voiced concern with the multitude of existing disclosures imposed by the SEC and emphasized the need for simplification rather than added complexity.

“Finally, many on the left have raised concerns that we are not keeping up with our European counterparts in addressing environmental and social issues.

“They argue we should mirror the European approach rather than protecting our interests from the extraterritorial reach of foreign regulators. They want to allow European bureaucrats to dictate these priorities because they’ve been unable to legislate them here in the U.S.

“What this really comes down to is international competition. We will not be able to maintain our standing as the world’s most envied capital markets by taking misguided cues from other countries.

“The legislative proposals before us today aim to tackle these issues head-on.

“It’s time to get politics out of corporate boardrooms and discourage financial regulation from being weaponized to drive far-left environmental and social policy.

“By doing so, we can ensure that our markets remain competitive and enable American companies and workers to thrive.”