The preliminary list of AFL-CIO Key Votes 2017 is now available for download. The list can be downloaded as an Adobe Acrobat PDF file by clicking on the following link: AFL-CIO Key Votes – 2017 Proxy Season and is reproduced below for CorpGov.net readers.
The AFL-CIO Key Votes 2017 is designed to help pension fund trustees fulfill their fiduciary duty to monitor the proxy voting performance of investment managers. Good corporate governance matters to shareholders, and proxy voting is the most direct means for shareholders to exercise oversight in relation to the corporations they own.
AFL-CIO Key Votes 2017 Must be Cast in Your Interest
Like all proxy votes by pension fund trustees, those in the AFL-CIO Key Votes 2017 must be vote in the interest of plan beneficiaries… but that means little without enforcement. In 1988, the U.S. Department of Labor advised pension fund trustees that under the Employee Retirement Income Security Act, the voting rights attached to company stock are “plan assets” that must be managed according to ERISA fiduciary standards. The Department of Labor requires investment managers to “maintain accurate records as to proxy voting” and permit trustees to “review the actions taken in individual proxy voting situations.”
Pension funds generally delegate the authority to vote their shares to investment managers, mutual funds or a specialized proxy voting consultant. Because proxies are a plan asset, ensuring they are voted in the interests of beneficiaries is part of a trustee’s fiduciary duty. The Key Votes Survey is intended to help trustees fulfill this duty by reviewing the voting records of these investment managers, mutual funds and proxy voting consultants.
See my post, Fiduciary Responsibilities for Proxy Voting, from October 1995. Although proxy votes ‘must’ be voted in the interest of beneficiaries, they typically aren’t and neither the Department of Labor nor anyone else has ever successfully enforced this provision of law. (If I’m wrong, please let me know of any specific case.)
The proposals included in the Key Votes Survey are submitted by Taft-Hartley, union and public employee pension funds, as well as employee shareholders and other investors, and are consistent with the AFL-CIO Proxy Voting Guidelines. These proposals represent a worker-owner view of value that emphasizes management accountability and good corporate governance. A score representing the percentage of support, and corresponding tier group categorization, are assigned to each firm to assist trustees in evaluating the relative proxy voting performance of competing investment managers.
Note: the AFL-CIO Key Votes 2017 list is preliminary as of April 10, 2017 and will be updated as the proxy season commences. You can find the most up to date list of AFL-CIO Key Votes 2017 as well as the 2016 AFL-CIO Key Votes Survey by visiting the AFL-CIO’s Corporate Accountability page.
For more information, please contact the AFL-CIO Office of Investment at (202) 637-3900 or [email protected]g.
Take Action – End Corporate America’s Democracy-Free Zone: Make Use of AFL-CIO Key Votes 2017
Workers throughout our country can end public corporations as democracy-free zones by demanding their retirement and deferred compensation plans offer investments in funds that vote in favor of worker and environmental interests. Workers should be demanding to have the funds they invest in clearly display their proxy votes just as we can easily find those announced in advance of corporate annual meetings at ProxyDemocracy, CalSTRS, CalPERS, Australia’s Local Government Super and OTPP. If Americans could see in real-time, through AP and Reuters news feeds, how the funds they invest in are voting, they would demand that voting change or they would move to funds that vote in their interests. Because of the interlocking nature of these huge funds, it won’t be easy to change their voting practices. However, if we can succeed in changing one or two, the rest may fall like a house of cards.