Tag Archives | Vanguard

CII: Climate Competency & Risk

Shifting Investor Perspectives on Climate Risk & Board Climate Competency

These notes on climate competency are my last post from the Council of Institutional Investors Fall 2017 conference.  Find more at .  As a member of the press, I was excluded from the policy-making meetings. Still, it was a great opportunity to touch base with members of CII and to learn of recent developments and where we may be headed.

The panel discussion on climate risk and board competency hosted by the 50/50 Climate Project and the New York City Comptroller’s Office. From the program: Continue Reading →

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Walden Withdraws Vanguard Proxy Voting Shareholder Resolution

Walden Asset ManagementWalden Asset Management has engaged a number of investment managers and mutual funds on their proxy voting practices, specifically challenging voting records on shareholder resolutions addressing significant social and environmental issues. I see this as a major victory. However, more Vanguard shareholders need to speak out to ensure momentum continues. Contact Vanguard.Vanguard

In 2017, Walden filed resolutions with two Vanguard equity index funds that requested a review of their proxy voting at portfolio companies, particularly on shareholder resolutions focused on climate change. While mutual funds are not required to hold annual meetings for investors, Vanguard scheduled a November meeting for other reasons, thus setting up the opportunity for a vote on the Walden resolution. Continue Reading →

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Investor Stewardship Group: 1 Share, 1 Vote

Investor Stewardship Group logoInvestor Stewardship Group Launches Stewardship Framework for 2018

The Investor Stewardship Group (link), a collective of some of the largest U.S.-based institutional investors and global asset managers, along with several of their international counterparts, announced the launch of the Framework for U.S. Stewardship and Governance, a historic, sustained initiative to establish a framework of basic standards of investment stewardship and corporate governance for U.S. institutional investor and boardroom conduct.one share one vote

My own impression is that this group has been carefully constructed, probably stemming from many discussions at ICGN and CII. They have certainly started with an impressive group. Although most of the principles are relatively ‘safe,’ I am delighted to see their position that “shareholders should be entitled to voting rights in proportion to their economic interest.” That one recommendation alone is huge. I hope they continue to build on their initial consensus items.

Internet Roadblock

Of course, the internet changes everything. Companies used to go public to raise money for factories, staff, etc. Now, they raise funds from private equity funds and scale all the way because they can build out through the internet with coding and algorithms. They go public only when founders and initial supporters want to cash out a portion of their investment. Continue Reading →

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Looking for Best SRI Funds? Start Here

Best SRI Funds

Best SRI Funds

After making the decision to apply the principles of SRI investing, many clients embark on the initial step of selecting a core stock fund. Traditional investors have literally hundreds of highly efficient core investment solutions. However, SRI investors aren’t so blessed—which is why I put together this core list of Best SRI Funds.

Best SRI funds need to start out by being financially sustainable. Some fund companies seem to believe that they can rake in higher fees on the backs of well meaning investors. The primary objective of a core fund is to match the market with as little cost drag as possible. Continue Reading →

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Vanguard’s Political Disclosure Vote: Wrong!

Vanguard's Political Disclosure Vote is Wrong (2nd from bottom on graph)

Vanguard’s Political Disclosure Vote is Wrong (2nd from bottom on graph)

VanguardLet’s change Vanguard’s political disclosure vote. Our nation’s largest mutual fund voted against all resolutions submitted by shareholders asking for companies to disclose their political spending. Shouldn’t we have the right to know what candidates our investments are supporting?

Vanguard’s Political Disclosure Vote Needs Changed

Join more than 59,000 American’s who have already petitioned Vanguard to change their proxy voting behavior. Support shareholder resolutions that seek disclosure of political spending at companies where Vanguard owns a shares. If Vanguard votes with us, instead of against us, it won’t be long before other large funds like BlackRock start doing the same. Within a few years, we could actually begin to know what companies are funneling how much money to which candidates. Vanguard’s political disclosure vote can be changed – with your help. Sign the petition by U.S. PIRG to change Vanguard’s political disclosure vote. Continue Reading →

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Reeds Delivered a Corrected Proxy for Christmas

Reeds Delivered a Corrected Proxy for Christmas

Reeds Delivered a Corrected Proxy for Christmas

There it was under my tree, Reeds delivered a corrected proxy for Christmas!

Santa has finally been good to Reeds (REED) shareholders.

I’m tacking notification of the corrected proxy as a sign that Founder/CEO, Christopher Reed might be at the start of a new attitude toward  SEC rules and corporate gReed's Mugovernance, I changed my vote. I voted for Mr. Reed, the auditors, my own proposal to require a majority vote to elect directors and against the rest of the board and the “incentive” stock option plan. The incentive plan lack specificity.

Of course, my proxy didn’t magically appear under my Christmas tree. Reeds Inc. had to pay to have the link to their revised proxy sent out by Broadridge to brokers and banks all over the country. After being reminded several times, Reeds finally did the right thing. Unfortunately, their reluctance and delay necessitated postponing their annual meeting for more than a week but, despite the additional cost to company and shareholders (including me), it is good to see our company now following the law. Continue Reading →

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Jack Bogle on Diversified Portfolios vs Speculation

Jack Bogle

Jack Bogle

Buying and holding stocks and bonds for the long term and maintaining a diversified portfolio are still the smartest strategies for the average investor, says Vanguard founder Jack Bogle in answer to Mark Cuban and other critics of these traditional approaches. In the Big Interview with Journal columnist Jason Zweig, Bogle takes aim at the culture of market speculation. Betting on long odds, he says, “doesn’t pay off very often.” Continue Reading →

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AFL-CIO Key Votes Survey Results for 2012

Vanguard, Northern Trust, BlackRock and Fidelity scored the lowest among researched funds in supporting AFL-CIO endorsed proxy issues in 2012, according to their 2012 Key Votes Survey. Calvert, Amalgamated Bank, McMorgan and Bridgeway scored the highest.

On proxy-voting issues at 32 companies the AFL-CIO considers representative of a “worker-owner view of value that emphasizes management accountability and good corporate governance,” Vanguard voted against all 32 proposals; Northern Trust, 28 out of 29; BlackRock, 30 out of 32; and Fidelity, 28 out of 30. Continue Reading →

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UNFI: How I Voted – Proxy Score 17%

United Natural Foods ($UNFI) is one of the stocks in my portfolio. Their annual meeting is coming up on 12/12/2012. ProxyDemocracy.org had collected the votes of three funds when I voted on 12/5/2012.  I voted with management only 17% of the time.  View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank will be voted in favor of management’s recommendations. (See Don’t Let Companies Change Shareholders’ Blank Votes) Continue Reading →

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"Say on Pay" to be Annual

I believe ISS/Risk Metrics created a policy on the Frequency of Advisory Vote on Executive Compensation (Management “Say on Pay”), a new proxy item required under The Dodd-Frank Wall Street Reform and Consumer Protection Act.

Their Recommendation: Vote FOR annual advisory votes on compensation, which provide the most consistent and clear communication channel for shareholder concerns about companies’ executive pay programs.

Rationale for Update: The Dodd-Frank Act, in addition to requiring advisory votes on compensation (aka management “say on pay” or MSOP), requires that each proxy for the first annual or other meeting of the shareholders (that includes required SEC compensation disclosures) occurring after Jan. 21, 2011, include an advisory voting item to determine whether, going forward, the “say on pay” vote by shareholders to approve compensation should occur every one, two, or three years.

In line with overall client feedback, ISS is adopting a new policy to recommend a vote FOR annual advisory votes on compensation. The MSOP is at its essence a communication vehicle, and communication is most useful when it is received in a consistent and timely manner. ISS supports an annual MSOP vote for many of the same reasons it supports annual director elections rather than a classified board structure: because this provides the highest level of accountability and direct communication by enabling the MSOP vote to correspond to the majority of the information presented in the accompanying proxy statement for the applicable shareholders’ meeting. Having MSOP votes every two or three years, covering all actions occurring between the votes, would make it difficult to create the meaningful and coherent communication that the votes are intended to provide. Under triennial elections, for example, a company would not know whether the shareholder vote references the compensation year being discussed or a previous year, making it more difficult to understand the implications of the vote.

From my understanding, ISS held a conference call on the new policy. I wasn’t on the call but I understand 250 were. I also understand that during the call it came out that CalSTRS, State Street and Vanguard all support annual votes. CalSTRS was expected but State Street and Vanguard supporting annual votes is likely to mean greater success. Annual vote seems headed for the default position.

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Vanguard on Corporate Governance

It is great to see an article in the WSJ from John Brennan, chairman emeritus of Vanguard on Improving Corporate Governance: A Memo to the Board (5/10/10).  Brennan says boards are improving and offers several bits of advice to keep the momentum going:

1) Know that you are the shareholders’ first line of defense.
2) Build value through mutual respect.
3) Communicate. Great boards of directors listen and hear.
4) Measure your success. Great boards are self-reflective and self-evaluating.
5) Compensate yourselves in equity.
6) Share your metrics.
7) Hold yourselves accountable.
8) Establish an “owner’s relations committee.”

Great to see a representative of Vanguard speaking out about the importance of corporate governance. I’m delighted to learn that largely passive investor Vanguard “hardly takes a passive approach to corporate governance.” Much good advice and I’d love to see Vanguard take it as well.

However, when I look at their voting track record on ProxyDemocracy.org I see, for example, the Vanguard 500 fund only voted against management twice on Board Independence and Performance proposals out of 235 times. If they really take corporate governance and voting seriously, why not announce those votes in advance on sites like ProxyDemocracy.org and MoxyVote.com. If their votes really are thoughtful, retail investors will follow their lead. It looks to me like they need to put a little more thought into proxy voting. (Hat tip to Martin Robins for bringing the article to my attention.)

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