Person

Allison Herren Lee

Party:

Democratic

Occupation:

Acting SEC Chairwoman in 2021

Affiliation:

Member of the Securities and Exchange Commission since 2019

As of March 2021, Allison Herren Lee was commissioner and acting chair of the Securities and Exchange Commission (SEC). [1] Lee was initially appointed to the SEC by Republican President Donald Trump to fill an open SEC seat reserved for a member of the Democratic Party. [2] President Joe Biden named Lee to serve as interim chair, while awaiting Senate confirmation of Gary Gensler, Biden’s nominee for SEC chair. [3]

Lee has made environmental, social, and corporate governance shareholder activism (also known as “ESG activism”) one of her highest priorities as an SEC commissioner. [4] [5]

ESG activism refers to individuals and organizations that advocate for ESG criteria as part of evaluating business operations. ESG considerations can be employed as a basis for investment or divestment in a corporation or fund, and in activism targeting those corporations or funds. Examples of environmental factors may be a company’s policies on pollution, climate change, conventional energy, the use of pesticides or genetically modified organisms (GMOs), and the extraction or use of raw materials. Social factors might broadly concern issues such as employee and labor relations, human and animal rights, certain forms of workplace diversity, and even the products or services that the company provides. Governance factors typically focus on the corporation’s structure and operation, and can include issues such as executive compensation, board member demographic diversity, political spending or lobbying, and management structure and policies.

Background

As of March 2021, Allison Herren Lee was commissioner and acting chair of the Securities and Exchange Commission (SEC). [6]

In addition to her career with the SEC, she has been a corporate governance consultant,[7] an assistant U.S. attorney for the Department of Justice, [8] and a private practice attorney specializing in securities law, antitrust law, and commercial litigation. [9]

She was a member of the American Bar Association’s committee on public company disclosure and has written on and taught courses on financial regulation and corporate law. [10]

SEC Career

Lee was appointed as an SEC commissioner in July 2019 and was named acting chair of the SEC by President Joe Biden upon his taking office January 2021. Before becoming a commissioner, Lee had also worked as a staff legal counsel for the SEC. [11] [12]

Lee was initially appointed to the SEC by Republican President Donald Trump to fill an open commission seat reserved for a Democrat. [13] Under SEC rules, no more than three of the five members can belong to one party. [14] Biden named Lee to serve as chair in an interim capacity and while awaiting Senate confirmation of Gary Gensler, Biden’s nominee for SEC chair. [15]

Regulatory Activism

As an SEC commissioner, Lee frequently cast votes against proposals that would have reduced the regulatory restrictions on public corporations.

She voted against allowing companies to keep their outside auditor if the auditor is working with affiliates of the company. The majority voted for the change, arguing it frees up SEC staff to investigate obvious conflicts of interest. [16]

She opposed a proposal to allow companies reliant on “gig workers” (such as Uber and DoorDash) to pay up to 15% of contractor compensation as stock shares in the firm. And she opposed a proposal that made it easier for companies to raise capital during an initial public offering. [17]

ESG Activism

Lee has made environmental, social, and corporate governance shareholder activism (also known as “ESG activism”) one of her highest priorities since becoming an SEC commissioner and as acting commissioner. [18] [19]

ESG activism refers to individuals and organizations that advocate for ESG criteria as part of evaluating business operations. ESG considerations can be employed as a basis for investment or divestment in a corporation or fund, and in activism targeting those corporations or funds. Examples of environmental factors may be a company’s policies on pollution, climate change, conventional energy, the use of pesticides or genetically modified organisms (GMOs), and the extraction or use of raw materials. Social factors might broadly concern issues such as employee and labor relations, human and animal rights, certain forms of workplace diversity, and even the products or services that the company provides. Governance factors typically focus on the corporation’s structure and operation, and can include issues such as executive compensation, board member demographic diversity, political spending or lobbying, and management structure and policies.

As an SEC commissioner in September 2020 Lee authored an opinion for the New York Times calling for more ESG-related regulations to be imposed on public corporations: “Both investors and the broader public need clear information about how businesses are contributing to greenhouse gas emissions, and how they are managing — or not managing — climate risks internally. Realistically, that can happen only through mandatory public disclosure.” [20]

Upon taking the acting chair position, Lee said, “During my time as Commissioner, I have focused on climate and sustainability, and those issues will continue to be a priority for me.” [21]

In March 2021, shortly after becoming acting chair of the SEC, Lee spoke at an event for the left-leaning Center for American Progress (CAP), and explained her vision for more ESG activism from the SEC. She began the remarks by equating ESG activism to the Civil Rights Movement and stating that “no single issue has been more pressing for me than ensuring that the SEC is fully engaged in confronting the risks and opportunities that climate and ESG pose for investors, our financial system, and our economy.” Asserting that investors were “demanding more and better information on climate and ESG” she stated that this demand was “not being met by the current voluntary framework” and suggested new reporting and corporate governance mandates the SEC could impose that would both compel public companies to evaluate and report their supposed ESG liabilities to investors and coerce the firms to adopt ESG priorities. [22]

Also, in the CAP speech she argued that political spending disclosures and donations for racial justice are ESG issues and criticized companies for being “inconsistent” if they boast about having carbon neutral policies but donate to political candidates that vote against environmental regulations. [23]

On the afternoon of Lee’s speech, Sen. Pat Toomey (R-PA), the ranking Republican member of the Senate Banking Committee, criticized Lee’s ESG agenda as a “total abuse of power and politicization of SEC’s disclosure standard.” [24]

References

  1. Allison Herren Lee. Biography. Securities and Exchange Commission. Accessed March 18, 2021. https://www.sec.gov/biography/allison-herren-lee ^
  2. Allison Lee. Ballotpedia. Accessed March 18, 2021. https://ballotpedia.org/Allison_Lee ^
  3. Cohn, Michael. “Biden names acting chair for SEC.” Accounting Today. January 21, 2021. Accessed March 18, 2021. https://www.accountingtoday.com/news/biden-names-acting-chair-for-sec ^
  4. Vinson & Elkins. “Biden’s Acting SEC Chair Wants Mandatory ESG Reporting.” JD Supra. January 26, 2021. Accessed March 18, 2021. https://www.jdsupra.com/legalnews/biden-s-acting-sec-chair-wants-5455756/ ^
  5. Lee, Allison Herren. “A Climate for Change: Meeting Investor Demand for Climate and ESG Information at the SEC.” Securities and Exchange Commission. March 15, 2021. Accessed March 23, 2021. https://www.sec.gov/news/speech/lee-climate-change ^
  6. Allison Herren Lee. Biography. Securities and Exchange Commission. Accessed March 18, 2021. https://www.sec.gov/biography/allison-herren-lee ^
  7. Allison Herren Lee. LinkedIn. Accessed March 19, 2021. https://www.linkedin.com/in/allison-herren-lee-16bb016/ ^
  8. Allison Herren Lee. Biography. Securities and Exchange Commission. Accessed March 18, 2021. https://www.sec.gov/biography/allison-herren-lee ^
  9. Allison Herren Lee. GreenBiz. Accessed March 18, 2021. https://www.greenbiz.com/allison-herren-lee ^
  10. Allison Herren Lee. GreenBiz. Accessed March 18, 2021. https://www.greenbiz.com/allison-herren-lee ^
  11. Cohn, Michael. “Biden names acting chair for SEC.” Accounting Today. January 21, 2021. Accessed March 18, 2021. https://www.accountingtoday.com/news/biden-names-acting-chair-for-sec ^
  12. Allison Herren Lee. Biography. Securities and Exchange Commission. Accessed March 18, 2021. https://www.sec.gov/biography/allison-herren-lee ^
  13. Allison Lee. Ballotpedia. Accessed March 18, 2021. https://ballotpedia.org/Allison_Lee ^
  14. Current SEC Commissioners. Securities and Exchange Commission. Accessed March 18, 2021. https://www.sec.gov/Article/about-commissioners.html ^
  15. Cohn, Michael. “Biden names acting chair for SEC.” Accounting Today. January 21, 2021. Accessed March 18, 2021. https://www.accountingtoday.com/news/biden-names-acting-chair-for-sec ^
  16. Freedman, Robert. “Deregulation critic Allison Herren Lee named acting SEC chair.” CFO Drive. January 23, 2021. Accessed March 18, 2021. https://www.cfodive.com/news/allison-herren-lee-securities-exchange-commission-biden/593805/ ^
  17. Freedman, Robert. “Deregulation critic Allison Herren Lee named acting SEC chair.” CFO Drive. January 23, 2021. Accessed March 18, 2021. https://www.cfodive.com/news/allison-herren-lee-securities-exchange-commission-biden/593805/ ^
  18. Vinson & Elkins. “Biden’s Acting SEC Chair Wants Mandatory ESG Reporting.” JD Supra. January 26, 2021. Accessed March 18, 2021. https://www.jdsupra.com/legalnews/biden-s-acting-sec-chair-wants-5455756/ ^
  19. Lee, Allison Herren. “A Climate for Change: Meeting Investor Demand for Climate and ESG Information at the SEC.” Securities and Exchange Commission. March 15, 2021. Accessed March 23, 2021. https://www.sec.gov/news/speech/lee-climate-change ^
  20. Vinson & Elkins. “Biden’s Acting SEC Chair Wants Mandatory ESG Reporting.” JD Supra. January 26, 2021. Accessed March 18, 2021. https://www.jdsupra.com/legalnews/biden-s-acting-sec-chair-wants-5455756/ ^
  21. Reuters Staff. “Biden names U.S. SEC Commissioner Herren Lee acting head of regulator.” Reuters. January 22, 2021. Accessed March 18, 2021. https://www.reuters.com/article/us-usa-biden-sec/biden-names-u-s-sec-commissioner-herren-lee-acting-head-of-regulator-idUSKBN29R1FN ^
  22. Lee, Allison Herren. “A Climate for Change: Meeting Investor Demand for Climate and ESG Information at the SEC.” Securities and Exchange Commission. March 15, 2021. Accessed March 23, 2021. https://www.sec.gov/news/speech/lee-climate-change ^
  23. Lee, Allison Herren. “A Climate for Change: Meeting Investor Demand for Climate and ESG Information at the SEC.” Securities and Exchange Commission. March 15, 2021. Accessed March 23, 2021. https://www.sec.gov/news/speech/lee-climate-change ^
  24. Matthews, Chris; and Robert Schroeder. “Acting chief says climate, ESG are ‘front and center for the SEC,’ ahead of new disclosure push.” MarketWatch. March 15, 2021. Accessed March 23, 2021. https://www.marketwatch.com/story/acting-sec-chief-lee-to-speak-on-meeting-investor-demand-for-esg-information-11615821843 ^
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