The long-awaited Securities and Exchange Commission "proxy plumbing" concept release to seek input on how to modernize the voting infrastructure is officially on the agency's agenda.

The SEC has scheduled an open meeting for July 14 to consider whether to issue a concept release to solicit public comment on whether the agency should consider revisions to its rules to promote greater efficiency and transparency in the U.S. proxy system and enhance the accuracy and integrity of the shareholder vote, according to the July 7 Sunshine Act Meeting notice.

Various constituents in the proxy voting arena have been anxiously awaiting the concept release, which is part of a broader review of the federal proxy rules.

In remarks last November, SEC Chairman Mary Schapiro noted that SEC staffers were already looking at how corporate proxies are distributed and votes are tabulated.

Concerns about voting accuracy and shareholder communications aren't new. The Business Roundtable first sent a rulemaking petition to the SEC raising such issues back in 2004, and they were a topic of conversation during a 2007 SEC forum. Efforts to alter the system have proven complicated however, because of the intricacies of the existing system—even those who think an overhaul is needed admit that tinkering with any part of it could have unintended consequences.

However, recent developments, such as the adoption of majority-voting standards by many companies, the elimination of broker votes in uncontested director elections, a steepening decline in retail voting, and increasingly close voting results, have made the accuracy of proxy voting a bigger concern.

At the same time, action is expected on a pending SEC proposal to enable shareholders to place nominations for directors in corporate proxy statements. The proposal floated for comment by the Commission last year has been sidelined, awaiting Congressional action to affirm the SEC's authority to promulgate proxy access rules. The financial regulation reform bill reported by the conference committee and passed by the House included language that does that. However, the bill must still be approved by the Senate and signed by the president.

Among other things, the concept release is expected ask questions about whether proxy advisory firms should be subject to greater Commission oversight, whether there ought to be checks on the accuracy of the information provided by proxy advisers, whether advisers who provide services to both corporations and investors are managing and disclosing conflicts of interest appropriately.

Other topics the SEC is expected to seek input on include ways to ensure accuracy in vote tabulation; whether current rules adequately address threats such as "over-voting" or "empty-voting," where investors lending shares to others might distort the true count of a vote; how to address the abysmal voting rate among retail investors; and whether the current beneficial-owner system should be changed so companies can communicate with their shareholders more easily.

As previously reported, anticipation of the release has already spawned discussion papers, including one by the National Investor Relations Institute and the Society of Corporate Secretaries & Governance Professionals making recommendations related to proxy advisory firms, and one commissioned by the Council Of Institutional Investors opining on possible changes to the OBO/NOBO system.