Transcript
Welcome to shareholder Primacy from free flow media, podcast about activist investing Security's law, and all the ways. The financial and legal world's intersect and Collide in real life. Here with and Lipton law. Professor at Tulane in New Orleans who teaches and researches Securities and business law. She stands by and holds up the legal end of this podcast and that's Mike Levin an activist investor who lives and works in Chicago. He covers the financial side of our podcast, this week. We have two fun subjects. A first, we'll talk about a recent ruling in the fifth circuit, on the so called, NASDAQ diversity, rules related to diversity on Boards of directors and what happened and what it means for corporations and corporate law in the World At Large. And we'll also take a look at the lesser of the advisors ISS and glass Lewis and how they consult with. Corporate. Yes, we will. Let's first tackle, these NASDAQ diversity rules, and I think there's sort of like an immediate kind of case that were said a decision that happened that are being interested to activists who want diverse boards. But then there's some broader implications for if I understand correctly. So what what? Let's kick this off and start to figure out, you know what, what exactly were the rules? That was was a question here. Okay, yeah, so NASDAQ adopted these four diversity rules and the rules said, every listed company had to disclose the race and gender makeup of the board. And every board also had to have at least one woman and one person who identified either as an unrepresented underrepresented racial minority or as lgbtq and for small Awards you could have just one. But for one of those two, one of the pick and for the for a larger board, he had to have like at least two. And if you didn't meet the requirement, you had to explain why you couldn't meet. Um, that's called a complier explained rule. You do what they say, at a woman in person of color to the board or explain why you didn't. And I'll just say Bloomberg, actually ran a story while the world was in effect on the explanation and they were, you know, hilarious like a casino company said, it had trouble, finding candidates who were willing to subject themselves to the rigorous and intrusive process necessary to obtain a gaming licenses. That's what I could have women on their boards. That's why I don't know if you know, color on their boards that happened to me. I was on a board where I needed gaming licenses and, and I know it's, it's kind of interesting. It is a hassle, these gaming, these gaming license in boards and agencies are are tough. Well, I am glad to hear it, but I am not sure I buy it as an explanation. For why? Yes, no, it's just you just gotta find someone who's willing to do it, but yeah. Okay. So, but that was the rule. You had to have two directors who aren't white straight men or you had to explain yourself now, Here, the NASDAQ Stock Exchange. It's a private company. Its corporate owners actually publicly traded, but because the NASDAQ is a stock exchange, even though it's a private company, it's also overseen by the SEC. So, to get these rules passed, it had to petition the SEC and take public comments, and then it amended the rules, and ultimately, the SEC approved this set of rules. So just to. So this is only NASDAQ companies. This is not icy companies. So it's all the smaller newer Tech kind of companies which, you know, presumably, they'd be at least a little interested. Maybe not in more diverse boards and and this was a requirement to keep your listing that you either comply with these. Having these two diverse candidates to diverse directors or explain. Why not exactly to keep your listing to continue to be traded and that moved to the pink sheets and so forth. Okay cool and then the SEC blast, this like all listing, like nicey NASDAQ, yes, SEC overseas all their listing. Exactly. Okay, go ahead. Well I mean The really interesting question is sort of like well why adopt these rules, right? I mean now the answer like that NASDAQ would say is they adopted them because investors wanted them. They claim investors wanted more information on board diversity and investors wanted more diverse boards. And when I say investors, I mean like institutional investors, BlackRock Vanguard State Street. So at least the question like why do large institutional investors know? I didn't even care. Why do they care? And there are a couple of different answers and you can take your pick. So one story is its wealth maximizing. It is better for companies. It is better for profits, if boards a diverse, why maybe they can absorb more complex information? Maybe they challenge each other's ideas? Are they identifying new markets? Whatever. Your story is, one strand of thought is diverse boards do better. But there's another story which is that's not true. The evidence, the evidence is I will say I've read some of the analysis. The evidence is mixed. Its weak, it's contradictory and so Then well why are they asking? And so some would say that the real reason large investors want diverse boards and why NASDAQ wants them is their woke, right? Yeah. This is just a way to express their actually a great force for woke liberalists for the rest of America. That's another story. Now, I Personally, think the titans of Finance in America are particularly woke. Oh no. I probably agree with you. Right, but I actually did something a little different. I do think it's worth maximizing but or its wealth maximizing for asset, managed managers to ask for them. But but the reason isn't like this direct idea, that racial and gender diversity necessarily contributes to better decision-making. I think it just looks better when the massive public companies, make some gesture towards being inclusive. Like sure. I really sorry. We are living in a world where someone murdered the CEO of United Health and he's being held online as a hero. Oh, the murderer is yes, being priests by. I mean, he kind of widely. Yes, we're so many people are. So Empowered exerted by large corporations, it may be diffuses. Some of that anger of Corporations, make an effort to at least a gesture. At least all the decisions are made by some kind of good old boy Nets. So a bunch of, as you say, straight white men, I think that is the real purpose of the rule. All right. So so NASDAQ promoted this for these these, you know, reasons whatever and investors want. Right. And then, and then the SEC, which is their job said, this is kosher to have these rules. But then somebody challenged the listing rules, In court, right? So how that work. Yeah. So immediately after the SEC approved, the rules a couple of conservative organizations, filed illegal challenge, one was the national Center for Public Policy research. And yeah, there they do this all the time. And another organization was called The Alliance for fair board recruitment, which as far as I can tell was created for the purpose of challenging. These rules and procedures like specifically like a single. I know I invest in spvs single purpose you know single purpose Vehicles. This is a single purpose lobbying organization. Yeah. I mean I think they said in the next but I think they were created for this purpose. They saw this rule coming in, okay, I think. I mean, they're very new and we don't know much about them and I think they were created about the time, the rules, and the name Alliance for fair board recruitment. I mean, this is, that's so they could petition to an appellate court to challenge the rules. And of course, they chose to petition to the 5th circuit, they Shows the fifth circuit for obvious reasons if it's circuit is dominated by very conservative judges, who are also very aggressive about striking down, Democratic initiatives. But by pure luck, they happen to draw a panel of democratic appointees. You get a panel of three. And by luck, they actually got three Democrats and that kind of democratically approved Justice appointed judges, right? Democratic president, and that panel upheld the rule. But then after this panel of held the rule, the full court, all the judges, they agreed to rehear the case because obviously they didn't like the fact that this panel of democratic appointees said, the role was okay. So, and that's called, that's called and bank, I'm bunk. So all the judges agreed to hear the case and when they reheated, they voted to strike it down nine to eight. So it was actually really close because a couple of the conservatives actually voted with the Democrats. Um, yeah. So that is why. Okay? So so now what was the Court's reasoning and the folk the on Bank, what was the the majority's reasoning for rejecting these? Okay. So the Court held that these rules went beyond the actual purposes of the Securities Exchange act. And since the SEC can only approve rules that are consistent with the exchange act by a proving. This rule the SEC exceeded its Authority and to get there, the fifth circuit had to start by analyzing. Well, what are the fundamental purposes of the exchange? I mean, if this rule is going to be inconsistent with the fundamental purposes of the exchange act. Well, what are those purposes? It's view. Is that the exchange Act only has a few really basic purposes. It's there to prevent speculative bubbles. It's there to prevent fraud and it's there to ensure that they're sort of efficiency and competition in the execution of Security's traits. That's all. That's pretty narrow. So three narrow. That's three purposes. Yeah. Prevent Part, well, in your order, prevent bubbles, prevent bubbles, prevent fraud fraud. So, and then just Securities trading to make sure that that goes properly that when I, when I send it, when I send my orders in in a day that they're getting, they're getting best best execution. It's called exactly, okay. So in the Court's view information about board, diversity rules designed to encourage board diversity, they have nothing to do with those fundamental purposes. The foundational purpose of the SEC or the exchange act, okay? And that's why the SEC acted Beyond its Authority when it's the view. All right, so that was the opinion of the nine. What about the eight? Well, Held the rule and I was presumably, I'm starting up. So presumably the two that approved on the limited the three panel, we're part of the eight. Yeah, this one. There were one statement but then they changed it when they were part of the eight or something. Yeah, EX were sitting one was senior and seniors. Don't aren't you? I'm not sure. But whatever is definitely. The panel was there and the other Democrats were there, but there were a couple of Republicans as well, and they actually changed their reasoning. And I'm pretty sure that the reason they changed their reasoning was to hold on, to those Republican votes. Like so, they changed what they said because they adopted a tactic that was going to appeal, more to the Republicans. So the dissent said their reasoning was NASDAQ is a private company. It's a private company that sets its own rules for who gets to use its services in a competitive market with other exchanges. And NASDAQ decided, it would be more competitive in adopted. This diversity Rule. And the SEC has a government. Regulator is supposed to have a very limited role here. It's required to approve nasdaq's own rules as long as they're consistent with the exchange act. So the view of the you know, the The Descent this descent, the one that included Republicans was very much. Like why would you tell a regulator they should be more involved with a private company? That's ridiculous. We don't do that. Oh that's totally against your principles of so right. Regulation over. Okay, the original paddle opinion, wrote it and this is why I think You know, for the Republican. So the original panel opinion, the one that was written by Democratic judges that one said, unlike the 5th circuit, the bomb fit circuit that the Securities laws are about more than fraud prevention, there are about full disclosure, right? There's a whole disclosure that's related to, but apart from Fraud exactly. They're about full disclosure. They're about making sure that investors have all the information. They need to make decisions to compare companies. And according, and here, there's lots of evidence that a wide range of investors want this information. So Court should just deferred and the NASDAQ and the SEC just in its capacity, is a private company just in capacity of private company. But The Descent the original paddle opinion was Much disclosures why we have the exchange act and this is part of that, you know, part of that. But The Descent was The. Descent once they heard it with Republican, then it was less about full disclosure and more about private company. Let's not interfere with this private company making private company. This is So there's there's an interesting little element to this, that sort of sheds, light on the politics of judicial opinion. Maybe when you get a group of 15 and you sort of see the who's going to be part of your age, just use this particular one. You know what you say? And we've kind of known like I've heard I don't study the Supreme Court at all but that when there's groups of Judges like this, there's a little bit of horse trading that goes on. I mean, bargaining. An arguments about exactly how the opinion rights I mean, actually I should check and see who actually with the design because I don't remember. But, yeah, I mean, it's just it's it seems to me fairly obviously a different bent and there's a reason for it because Republicans are part of that was something they could all agree. And I know that not just the the parties to the, there were a lot of amicus priest Falls, a lot of them. And some of them in favor of holding the rule really focused on the private company status of NASDAQ because they knew that they were trying to appeal to these Republican. Judges, who would find that argument more, right? So this is, this is, this is getting way beyond what you think of diverse boards. So, this is much and what you what, what the what the, what the purpose of the SEC, or at least of the exchange act that created the SEC. I think it's about much bigger issue than diverse Sports and that's kind of, like why even worries me. So I'll start by saying like, I don't worry, you said worries, you and this. And I want to hear about that, all right? I mean I'm just I'm not terribly sick to the argument that this is just a private company, doing private company things. I mean, one of the more hilarious things about the exchanges is whenever you try to sue them, they argue that they're completely immune because they're performing a regulatory function and that if you say, oh, well if you're a regulator, I'm going to sue you for violating the Constitution they say Constitution, we're just private companies. We're not bound by the Constitution, right? I mean, well, all this was going on in a completely different case. NASDAQ delisted, a SPAC for not complying with a listing rules and the facts suit claiming that the nasdaq's actions were arbitrary and capricious. And what did NASDAQ say. It said that when it implements its listing rules, it's acting as a regulator and therefore, is a new from private losses. So interesting. So because this like all of these like arguments about like, you know, if you're trying to sue them, they're either a regulator or not a regulator, according to whatever, they want to get out of the lawsuit about. So, I mean, I'm not, I'm just, I don't, I'm not terribly stupid. That's just a private company, right? Because the NASDAQ, when it's convenient, doesn't think it's a private, exactly. It's a Later when it was to be a regulator, it's a private company when it doesn't want to be a regulator and I just don't buy it. But that said I'm really terrified by the fifth circuits approach because the permit as you said the purpose of the exchange act are much much broader than simply preventing fraud. So one really big purpose of the exchange Act was to regulate proxy voting, the fifth circuit acknowledged in its opinion, that there are a proxy voting parts of the law but it kind of hand wave them. And as, not really that important and that's wrong Congress was very concerned about abuse of the proxy Machinery in 1934, and in particular Congress was concerned about self-perpetuating boards that would control vast corporations without concern for investors. I mean, this was Progressive Era legislation, FDR was out there making speeches about raining in princes of property, making sure that shareholders could vote and can actually assert control over corporate managers. That was a very big deal that was. Yes. And then it was it was a foreign concept it was right? If it was kind of like a proxy voting that's that doesn't matter. Even more. I think most people today would say the main purpose of the Securities laws is to make companies disclosed information so that investors can set an appropriate price. Its evaluation that's what I do. That's right. We want investors to have information so they can efficiently price security and the reason we want that It's because we want to make sure that capital is allocated efficient and efficiently. We want to make good productive businesses, get money and we want bad businesses that are not productive to not get money, that's how I decided about where it all. Okay. So like you're just seeking a return on your investment and that's fine but by doing so you allocate resources appropriately throughout the economy. It's how we grow our economy. It's how we put resources to their best use and that requires a lot more disclosure than simply what's necessary for fraud prevention. But the fifth circuit, I think, went out of its way to Signal it, went out of its way really to Signal, it's running the seriously cut back on what it thinks. The SEC is authorized to do. I think this is really a first step. It was like a sort of shot the bow to start raining in the SEC across the board and that could have some pretty dramatic implications. That's a big in the SEC. Does not just the hot button issues like diversity in climate. So and this so right now we have a 5th circuit opinion but I don't think anyone's going to appeal it. I mean the SEC is not going to kill it under the Trump Administration and NASDAQ I think is that it's not going to kill it. Thank you. So this is not going to Supreme Court. We don't think. No. I think it's I think it's probably over. Who was just out there with this, what I think this you know. So ominous fifth circuit opinion. That's like, okay, what are you gonna do next? Right. How else are they going to rain in the SEC? Oh, exactly. Well that's, um, that's that's a lot to think about or even worry about it because, I mean, you know, again I've said before, as much as I complain about, you know, how they handle, no action letters. I kind of like the SEC. I mean, as an investor, I like to protect you. So all right let's um let's let's pause how about that? Take quick break and we will return more to talk about I assess and glass Lewis here at shareholder Primacy. Gerald, her prime. Minister to you by free float. And lyrics.com the only free database of corporate directors. Their influence and their performance. If you want to Stocker, retirement plan go to freefloat, analytics.com. And look up which of your elected directors are performing well and which aren't use your vote in the alternative democracy and get your data at free. Float analytics.com. Now, back to the show, Missing side of proxy advisors ISS and glass Lewis about how they consult with corporations that have, when they canceled with investors. So what exactly did they do, well? We all or at least investors and companies are you know intimately familiar with ISS and glass Lewis. There are these proxy advisors that, you know, they're fundamental job is to tell shareholders how to vote when they have, you know, dozens and hundreds of companies that are have all sorts of issues to vote on. They write reports and analyze proxy statements and say, okay vote for these directors, vote for this proposal and so on so forth. That's, we don't have to cover that. And you actually you know what, what reminded me of this which I written about two, three months ago was how when we were talking a little while ago about what might happen in 2025. Oh yeah, is how We? Speculate that there might be significant clamp down on what iss and glass Lewis does in a new presidential Administration. And I kind of think this area of advising corporations will be a possibly a big subject. Yeah. Of of what they of what they do. Now I need to say a couple things right away. I'm at least for my part. I am generally an enthusiastic supporter The proxy advisors kind of a fan. I think they provide a valuable service. I think they're generally, you know, pretty dispassionate in my area of proxy contest. They tend to be as frustrating as they are helpful. But overall they're they're they they provide a good service. So this is all motivated. In fact, by something that I saw when I was looking at some other subject about About, you know, director qualifications and how glass Lewis in fact, helps it tries to solicit support from directors and I kind of wondered. I wonder why glass Lewis is doing that as it turns out glass Lewis and ISS both have these businesses or these sections of their business that serve corporations very specifically. So we got kind of curious about that. I did a whole bunch of looking into what they do and how they serve them and it was it was pretty pretty interesting. So there's sort of two, two areas of service that they provide to corporations to Boards of directors. The first is just a whole just reams of data and Analysis about proxy voting executive compensation, so just tons of data. So basically the same kind of data that they use and provide to their investor clients, they make available in various ways to corporations, but then the second gets a little more interesting. Which is some advice about how to interpret and work with that data and Analysis. So ostensibly it's so that a given corporate client can improve corporate governance and so forth and say, okay, this is kind of how people have voted and what people think and this is how we can make our exact program you know, better and more responsive or at least how to improve the scores. The rating i s s in glasses are suspicious. It looks a little bit like a protection. Oh absolutely. There's there's all sorts of of potential for conflicts and so forth in compromised and so on that's that's really interesting and worth worth exploring and that's what we can. We can talk about for a minute. So i s s, Has a completely separate business entity called, ISS corporate where they, that's where they kind of house these these Services glass Lewis isn't quite as distinct about how they do it, at least based on what you could sort of get from public information. Now, you know, everything. I was able to find out was just from, you know, reading and research. I didn't, you know, go interview anybody though. I'm I have I have friends at both places. So I'm a little familiar with with kind of how these businesses work and anyway, so there's really four areas of these of these in analytics and two are more important than the other two. The two that are less important is cyber risk and sustainability, sustainability, being the E of ESG and investors are, you know, kind of curious or concerned about how a given company handles cyber risk. And you know how Well, they're protecting themselves and same thing, you know, what are they doing to create a more sustainable Corporation. So for so, Again in the same way that ISS and glass Lewis will help investors try to understand how a company is doing here. They're also going to sort of reflect back and help a company understand you know how how do investors think of your cyber risk and sustainability programs anyway but those are less important. The two more important ones are corporate governance analytics and also executive comp annual expertly the executive comp analytics as you can imagine that's of keen interest CEOs. And so what I assess started doing in class Lewis followed quickly was actually I thought pretty clever. Pretty resourceful. Okay. For Corps government. You know take you know these Reams and reams of data do the Analytics. And the same kind of reports, the same kind of scores that they would then you know, provide to investor clients. You know, it could be Pension funds, it could be glass low, I could be, you know, Black Rock State. Treating vanguards all sorts of smaller funds institutions, all their investor clients, they get all this this analysis that helps them. Formulate voting recommendations or in fact, just recommends how to vote. They basically just kind of repackaged it and said, here's how corporations can use the same data. Now, In fairness those two businesses as far as they can tell are much smaller than the, the core investor oriented businesses. You know, there's there's many fewer people work there and so forth and, you know, they, you know, try to sell these consulting services to incorporations in the same way, but it's just not nearly in the same scale, but nonetheless, they kind of exist. So so it was just basically a repackaging exercise that that worked pretty pretty well. So now it's worth noting that, you know, there's there's sort of three Three thrusts of the Consulting business is they basically say, well first, here's the score. You, we expect, you're going to receive and that's where again, these potential conflicts come up and we'll address that in a little while. And then they could they sort also, advised, and they'll say, Okay based on our experience with shareholders and we advise them all here's how we think shareholders are going to vote. On your, you know, exact Camp, incorp of corporate governance. Here's how we think that also I think is where the conflicts are, they'll vote, whether it's the way, we tell them to how we can influence them, right? Exactly. Or, you know, if we, and then finally is importantly, the real Consulting, the real advisory is how a company can, you know, improve its corporate governance as a company or at least improve the scores. You know, what changes should they make in the comp structure in their bylaws and so forth that will improve how they how they think about it. Now these Consulting Services very well established in Consulting on corporate governance, exact comp and glass Lewis, I think does this morning exact Compton and corporate governance. It's not clear how they charge for this. What the fees are do you have a separate Consulting project, or is it part of your subscription because most of these most of these work, at least at its basic level as a subscription service? Just like, for investors, it's basically, you know, ISS and glass Lewis or Subscription Service, you pay, you know, some five-figure number to get reports. And so forth. Same thing for Companies. So it's not clear, whether all is traditional Consulting is part of your subscription, whether you pay additional fees and so forth. It's I would expect that there's additional fee based Consulting A couple other quick comments about it, which are kind of interesting. And then we can talk about the conflicts is is Again because they've been doing it longer really tailors their services somehow. So for example, they have a whole separate, you know, little part of ISS corporate that works with law, firms and work with comp consultants and so forth. So your comp consultant can, if you're aboard, can, you know, contract through you to, you know, get the ISS analysis, and sort of, you know, work it into their advice. I assess also has a really interesting fascinating business. I didn't realize this until recently they Acquired and an Eva, Eva is economic value added, which was this this really cool way of looking at Capital invested in a business and some really neat metrics. And a guy at one point Bennett Stewart, had had created this this business, he was one of the founders and something called Stern Stewart which you know, 20 plus years ago, was the pioneer of this Eva system. Anyway, I didn't realize this ISS now owns, Eva owns the trademark and so forth, so it's So what does it Eva do? Because I've never heard of this, hmm. Eva is a Consulting business that ostensibly helps corporations to try to create better metrics for budgeting for Capital allocations. It's not even, just like for shareholder voting, it's like, oh no better, right? Right. It's a whole different way to look at internal metrics for, for measuring a business. Gets it. Purports to get away from Pure accounting measures and also allows business to understand the true cost of capital. Anyway, it was it was really revolutionary and it's done pretty well since then though it never took off. I don't think the way that Stern and Stewart really Envision. And then, of course, I assess kind of bought them, which was kind of interesting anyway. So I SS owns them. And that's part and it's part of ISS corporate. So anyway, so they really, you know, have this fairly sophisticated set of services, both ISS and glass Lewis that they provide to corporations and and that of course has led to all these, you know, worries and fears. You know, is there is there a way to compromise that is there a way that a corporation can say? All right, can I buy everything that you sell? Don't give me and then you'll recommend that shareholders vote in favour and you'll be my friend. And and that's that's a legitimate fear. You know, and and there's all sorts of potential conflicts, you know, could you could you just with this, can we have a chance to talk to the researchers and so forth or whatever? Anyway, so there's That that's been, there's been a huge debate about how how this affects the kind of advice that I SS renders to share. Isis was rendered to shareholders, and after looking at it, I'm at least as a shareholder. I'm, and again, I'm not a subscriber. I'm too small. I make my own voting decisions, but as a shareholder, someone who's a representative of Cheryl holder thinking, I'm pretty comfortable with how they deal with their their conflict. So first As I mentioned a minute ago, I assess as a completely separate entity for this and there are walls that I'm aware of between, I asked this corporate and the central ISS business that are fairly thick and fairly High. And the limits on their ability to talk between them are pretty considerable and the penalties for violating. Those are pretty serious. Okay. It's not clear. And, you know, and that extends to having their own offices, own employees, own leadership, everything. So there's really a lot of separation between the two businesses. It's not clear how glass Lewis, how separate class Lewis does this, though. It they do have A newer entity that dates back two or three years, I think 2021 where it's called glass Lewis, corporate similar to ISS corporate. I guess we're at least the exact Camp Consulting sits within glass Lewis. So I think glass Lewis is segregated. The exact comp Consulting that way. So at least on paper there's there's that kind of Separation. There's also all sorts of codes of conduct that they've been very public about ISS has a formal one. That's a document that applies to Issa and ISS corporate that's you know, stats forth. These rules glass Lewis has a similar one. So they've sort of publicly said, here's our standards for this. It's also worth noting that ISS The whole company has registered with the SEC as an investment, as a registered investment. Yeah, that's that. That's come up with some of their proxy recommendations in general. Yeah, exactly. So they they have violently subjected themselves to SEC supervision and regulation presumably every you know so often they get an SEC inspection and so forth that also helps to assure at least shareholder clients that this corporate business won't necessarily compromise. Their Their advice to shareholders and their voting recommendations. Yeah. I mean, I think the walls all the time and you could, you know, like they might claim that when they make their voting recommendations, the people who do that, don't even know. Who the Consulting clients? Are they trying to? Yes, yeah, yes. So right, so, I make a voting recommendation but I don't even know if this company is using the Consulting service. So I can't possibly favor or disfavor based on correct the client. And that's, I mean, like all good consulting firms. The ISS corporate Consulting list is pretty is proprietary, but it is, especially and that much. That's a good point. That might change know that the consultant that The Client List is proprietary from everybody but like the most senior Executives at ISS, you know, holding company or whatever. So they so when when you're doing a, you know, sort of the basic ESG shareholder proposal on analysis, which is really the ball of iss's work and board recommendations, none of these people. And particularly when, when the special special sits special situation team gets, Involved. That's the one that focuses on proxy, contests, and so forth. They absolutely do not know. Special situation, special set special situations. Yeah. So that's, that's a very exciting. Oh, yeah. I know they have its and that's, that's kind of the, that's where the, and ISS. That's really where the action is, the special set is they, for sure. Don't know who the, who the ISS corporate clients are. And, again, it's not, it's not a huge business, right? But it's one, that's gotten a lot of scrutiny, you know? There have been, you know, regular hearings and meetings and so forth at the SEC about how this works. I remember one a few years ago that I wrote a fun piece about this is when I was blogging years ago about how the the SEC, you know, tends to focus on this and that SEC is so much, so much other, you know, bigger things to work in now, like crypto and so forth. So, But it's still will probably get some further attention this year. And I, I'm guessing that if the SEC decides to make life hard for ISS in class Lewis. Yeah, I could see a situation where there they, they might, you know, really focus on these two services for corporations and really try to cut them off. Yeah. I don't know. Yeah. I mean that's been proposed there. There's been proposals to do, you know, more burdensome disclosure about the conflicts as well as more disclosure about. how they reach their voting recommendations more liability, you know, for right you know that kind of thing and that's really unfortunate because I at its core I view ISS We're going to court either Corporate Services, which we were talking about or the basic services for Shirley's. It's a Consulting business, it's a private Consulting business. There is some argument that they're rendering some sort of investment advice that, you know deserves some recommendation regulation in that sense. But the problem is is that you know they kind of get under the skin of companies. Exactly. And companies you know companies can't like they don't go after like in a Cell signing analyst when he puts when they slap. I mean they do but there's nothing to the guy Securities license for putting us first lap on a cell on the stock. And so, you know, the SEC would probably be wise and they have to kind of to view it in the same Spirits. So anyway, so that's, that's what happens this year. I think, I think you're right to point out that maybe this will this will be a source of a source of consternation in action for the new, the new, the new SEC commissioner in the coming year, okay? So all right, I think we've we've covered all this in plenty of detail today so we can, we can maybe move on. How's that sound? Okay. All right, let's wrap up. It's been terrific talking to you and about these two, two fun subjects. And we'll have have more to discuss in the coming weeks. This is shareholder Primacy hosted by in Lipton and me, Mike Levin. I'm an independent activist investor and advisor to investors about their activist situations, and is the Michael M, Fleischman professor in business, law, and Entrepreneurship at to Tulane law school. And in, affili, Institute, you can find me Mike at the activist investor.com. And at lawn.edu our podcast is produced in distributed by free float media. Thanks for listening and we will talk