Below is an email I sent to Pensions & Investments (P&I) editorial chief Barry Burr praising their editorial enhancing fiduciary duty and opining on how it may speed the arrival of the time when retail investors will vote their values with the simple push of a button or two on their cell phones. I will follow this tomorrow with some additional remarks regarding the advent of open client directed voting, assisted by this expanded fiduciary duty.
Thank you for your important editorial, Winning Over Proxy Voters, which argues that institutional investors have a fiduciary duty to announce their proxy votes in advance of annual meetings, if doing so is likely to influence voters.
Votes are assets. Announcing votes in advance of meetings puts the value of those assets to their full use; announcing votes after the meeting does not.
Hopefully, your editorial will inspire more funds to “improve corporate governance in order to improve shareholder value” by joining those already disclosing their proxy votes before annual meetings. As your editorial points out,
proxy advisory firms could facilitate more disclosure through the use existing platforms that display proxy votes by funds.
For many funds, shifting to such advance disclosure is about as simple as making a phone call. Funds using the ISS voting platform can simply tell ISS they want to disclose like Flordia SBA. Funds using the Glass Lewis platform can say they want to disclose like CalSTRS.
Most funds that disclose in advance of meetings have also authorized ProxyDemocracy.org to scrape their data. Some even send it directly for posting so that other investors can compare the votes of up to ten fund families.
Few retail shareholders bother to vote and some funds don’t put as much thought into it as they should. However, many funds already vote almost automatically, based on well-developed voting policies integrated with proxy advisory firm voting platforms.
Algorithms and apps will soon facilitate semi-automatic voting by retail investors, based on surveyed values matched with fund vote records. The more funds that announce their votes in advance of meetings, the more influence they will have. They will also speed arrival of the time when retail investors will be able to vote their values with the simple push of a button or two on their cell phones.
James McRitchie, Publisher
Elk Grove, CA 95758
Take Action to Take Advantage of Expanded Fiduciary Duty to Improve Retail Votes
Help keep ProxyDemocracy alive, especially for institutional investors willing to step up to their fiduciary duty by announcing votes in advance of annual meetings. Make a small donation (not tax deductible) or contact Andy Eggers to make a tax-deductible contribution through their 501(3) affiliate. I’ll match donations up to $2,000 until the end of June.
See also Fiduciary Duty to Announce Votes (Part 1): Editorial Calls For Advanced Disclosure and Fiduciary Duty to Announce Votes (Part 2): Historical Background, Fiduciary Duty to Announce Votes (Part 3): Take Action.