As I mentioned in yesterday’s post, Council of Institutional Investors Fall 2014 Conference: Meeting Availability, I’m encouraging a research project looking into the impact that funds announcing their proxy votes in advance have or can have. I’ve joined with Pensions&Investments in arguing funds have a fiduciary duty to make such advance proxy vote disclosures when that could influence the outcome. Now I want to see if that condition ever applies. Under what circumstances is advance disclosure likely to influence the outcome of corporate elections?
I know we have a lot of readers who are expert researchers and could offer excellent advice. Below, I set forth a few initial thoughts. Before undertaking a ‘big data’ analysis, perhaps an initial bit of exploratory research warranted. I am thinking, we should begin by surveying each of the funds currently disclosing prior to annual meetings on a routine basis and ask them a few simple questions, such as the following:
- Why do you disclose your proxy votes in advance of annual meetings?
- Under what circumstances?
- Do you know if there has been any impact due to your disclosures?
- If so, what kind of impact? (examples)
- Do you think disclosing votes in advance should be considered a fiduciary duty if doing so could influence the outcome?
Possible Research Findings
- The larger the fund, the more likely they will influence others (CalPERS more influential than MMA Praxis)
- The more well known a fund is, the more likely they will influence others (google search entries might provide a rough guide)
- The more the fund is known as an activist, the more likely they will influence others.
- The larger a fund’s holding’s in any individual company, the more influence they will have with that company’s other shareholders.
- If a fund doesn’t routinely announce votes in advance but chooses to do so for specific companies (maybe most PX14A6G filers), they will have more influence with shareowners when they do choose to file.
- Funds disclosing at companies involved in proxy contests are more likely to influence.
Other possible correlations? What kind of data would we need to test those expectations and where can we get access to it? Please feel free to offer advice.