Pre-Disclosing Proxy Votes— Bradley August has advocated for funds to take that action since the days of ProxyDemocracy (archive link1, link2) and MoxyVote. Below is a comment August posted on LinkedIn regarding a recent Bloomberg Intelligence podcast. (updated3/16/2025)
Show host Rob Du Boff spoke with Carine Smith Ihenacho of Norges Bank Investment Management, one of the world’s largest owners of listed companies. They discussed how Norges is active in #ESG stewardship, engaging with management, voting at annual meetings, and choosing to divest. Perhaps most important (and most often overlooked) is the discussion centered around their experience with Pre-Disclosing Proxy Votes. August is a proxy voting data expert at Bloomberg and has decades of experience and influence. Follow August on LinkedIn, listen to the podcast, and read Bradley August’s comment in context.
Pre-Disclosing Proxy Votes: Bradley August’s comment on Linkedin
Carine Smith Ihenacho and Rob Du Boff
This is a great conversation with Carine Smith Ihenacho, Chief Governance and Compliance Officer at Norges Bank Investment Management, highlighting the value of pre-disclosing votes in advance of shareholder meetings.
Three key takeaways:
- Richer conversations. Instead of just proxy advisors weighing in before meetings, now investors with actual stakes in the companies are raising their voices.
- More engagement, less work. By being more transparent about how they’re voting and providing the rationales behind those votes, they reached more companies with substantive feedback. Plus, fewer companies called them to campaign for their votes, resulting in less work.
- Increased impact. By pre-disclosing, others can follow your lead. In fact, according to a recent paper, Norges is tripling their voting power (see link below).
Norges is one of several funds pre-disclosing their votes on Bloomberg’s terminal, alongside Calvert Research and Management, State Board of Administration of Florida, Ontario Teachers’ Pension Plan, CalPERS, and CalSTRS. These funds are increasing their voting power simply by being more transparent. If other funds are interested in joining their ranks, reach out to start a conversation!
Pre-Disclosing Proxy Votes: Additional Notes
Here’s a link to the study evidencing the increased impact Norges obtains by Pre-Disclosing Proxy Votes: Leading by Example: Can One Universal Shareholder’s Voting Pre-Disclosure Influence Voting Outcomes? Following Norges’ pre-disclosure to vote against a proposal, opposition by other shareholders increases by approximately 2.7%. Researchers also documented an increase of 3.6% in other shareholders supporting shareholder proposals after Norges had pre-disclosed its support. Compare that to ISS (12%) and Glass Lewis (6.5%). Note that these figures are beyond the impact of Norges’ director votes, which average about 1.5%.
As mentioned in previous posts, I have discussed the benefits of announcing votes in advance with leaders at many funds for almost two decades. The most frequent response to why they don’t Pre-Disclosing Proxy Votes is the fear of additional phone calls and emails they will get from companies wanting them to change their votes. Ihinacho noted that announcing their votes has not significantly increased such inquiries.
Since August makes succinct arguments, I’m bringing them to my readers’ attention. Pre-disclosing proxy Votes and their rationale promote richer conversations between investors and owners. Those conversations result in less work for both parties explaining the votes and a more substantive discussion of the issues. The only other fund that I know that is pre-disclosing proxy votes and their rationale is Calvert. I maintain a list of funds pre-disclosing proxy votes in my Handbook. Please let me know if you identify others.
Pre-Disclosing Proxy Votes: Beyond the Blame Game
FCLTGlobal wrote an insightful report, Beyond the Blame Game: Why the Proxy System Needs to Change. FCLTGlobal is a non-profit whose mission is to “focus capital on the long term to support a sustainable and prosperous economy through research and tools to drive long-term value creation for savers and communities. Its members are leading worldwide companies and investors (see below).
Provocative Introduction
Investors generally believe that proxy voting does not affect their long-term investment performance in any attributable way, so they limit their efforts. Most asset owners staff the function with a few non-investors, most active managers focus on just a few strategic votes most index managers are moving toward pass-through voting, and most retail investors do not vote unless they are disgruntled.
Conclusion Re Current Direction
Legally, the value of the vote is explicitly linked to fiduciary duty in several of the largest capital markets globally, at least for some of the largest pools of long-term capital, such as pension plans. Discharging of that duty at scale, however, has led to standard proxy voting policies issued by third-party specialist service providers becoming the primary tool for meeting the fiduciary duty obligation. It seems appropriate to conclude that any duty that is so widely outsourced cannot be seen as one of the most highly valuable assets held by a fiduciary.
Solutions: Cost Minimization
- Use AI/technology for triage.
- Reduce the vote to focus only on director elections.
- Clarify that investors have the option, but not the obligation, to vote proxies and enable investors to simply vote with the company’s recommendation unless they opt out of a particular vote.
- Don’t run up the score.
- Raise the standard for shareholder proposals.
Solutions: Maximizing Value
- Have companies explicitly reward investors for casting their proxy votes.
- Create a formal market for votes.
- Have investors ‘show their hand’ via a call option-like mechanism for voting shares.
- Have asset owners explicitly reward asset managers for voting in their investment mandates.
- Share intentions in an open-source manner to ‘get out the vote.’
- Provide a rationale for votes against management.
- Engage before voting.
- Release ballots with enough time for research.
Next Steps
A well-functioning proxy voting system is critical to support effective capital allocation as well as participation in the public markets. This report has examined developments that have led to the current situation and broached potential solutions. Our analysis will continue to develop practical insights and tools that can have a systemic, global impact on the capital markets.
Ultimately, the ground is shifting in the global system of proxy voting. After decades of venting occasional frustration with proxy advisers, corporate and investment executives have refocused on the system and shifted toward a spirit of opportunity. Global companies and investment organizations can change the proxy system by helping to make sense of the status quo and developing alternatives that will lead to a stronger system.
To me, it is all a bit scary, like DOGE technocrats dismantling the government to privatize democracy, which ends up being democracy only for the international transhumanist billionaires who believe they can live forever by merging with machines. Still, the report is the consensus of some of the world’s most important and influential organizations. As such, it is worth reading and discussing. (This section was added on 3/16/2025)
Pre-Disclosing Proxy Votes: Rezonanz
As stated above, Bradley August is helping to make pre-disclosed votes by Norges and other pre-disclosers more available to institutional investors subscribing to Bloomberg services. Eleanor Willi appears to be offering a somewhat similar service through rezonanz.io. I hope to report more on both systems in the future.
“By introducing clearer benchmarking metrics to the often opaque world of investment stewardship, rezonanz breaks down informational barriers and delivers new insights for investors.”
rezonanz pre-disclosed Microsoft votes
Pre-Disclosing Proxy Votes: Future Directions
Norges is not just a manager of equities; they own the shares. Therefore, there is no separation of managers from owners. Many academics and politicians argue that the Big Three index funds and other managers have too much power. Concentrated power can lead to situations where fund managers prioritize their interests over those of individual investors who buy into their funds instead of investing directly in individual equities. See, for example:
- Are the Big Three Asset Managers Beneficial Stewards or Corporate Overlords?
- Big Three Power and Why it Matters
- Real Shareholder Democracy Is the Answer to ESG
One way funds have attempted to address this problem is to pass through votes to their beneficial owners. Since we can’t expect individuals to read through thousands of proxies, the most common approach is to provide individual investors with a small menu of choices from proxy advisors. Each of the Big Three offers such options. Others, such as Broadridge, Iconikapp, As You Sow, and Tumelo, provide options that can be applied elsewhere.
Mark Latham
As additional owners and fund managers pre-disclose their votes and rationale, I expect these options to expand. Future investors will direct their AI bot to vote hard stops on specific issues of paramount importance to them, as they can already do with Iconikapp.
Additionally, they will be able to say I’ll have what she’s having on matters that are not readily prejudged, like which directors to vote for or against or how to vote in complex activist situations. I expect to be able to copy the votes of Trillium, Calvert, Norges, As You Sow, or others in a tiered fashion. Of course, for that to work, investors will need to get at least somewhat familiar with the brands. How do Trillium’s votes typically compare with those of Norges, for example?
Mark Latham, an early mentor of mine, wrote a paper on Proxy Voting Brand Competition almost twenty years ago. Maybe we are finally getting there.
Related Posts
Leading by Example: Proxy Pre-Disclosures Influence Outcomes
Comments are closed.