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For continuing Forum attention to the
shareholder voting issues addressed in the October 2024 report below, see the following published articles:
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October 9, 2024, John Galloway of Vanguard, Inc., posting in
Harvard
Law School Forum on Corporate Governance: "Investor Choice"
[Pioneer's report of initial efforts to invite owner direction of
stockholder voting]
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October 15, 2024,
Semafor:
"Giant money managers catch Washington heat" [Pitfalls of
deciding how to vote other people's money]
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November 6, 2024,
Reuters:
"Companies boost social and climate reporting amid ESG backlash"
[Politics of addressing shareholder voting interests]
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November 18, 2024,
Financial Times:
"Vanguard says shareholders can vote for profits over ESG issues"
[Evolving support and encouragement of investor rights to control their
shareholder votes]
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November 27,
2024, Reuters: "Corporate execs see complications from more
fund democracy" [Views of corporate engagement professionals on
adaptations of pass-through voting]
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December
2, 2024, Matt Levine commentary in Bloomberg: "Texas Asks If
Index Funds Are Illegal" [Distinguishing between restricting
trade and supporting the marketplace]
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December 10,
2024, TAI | The Activist Investor: "Everything is Rational
Apathy" [History of questions about diversified investor
attention to shareholder votes]
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February
3, 2025, The Shareholder Service Optimizer: "Reflections on
'Engaging with Investors'” [Professional perspectives on essential
communications between owners and users of capital]
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February 26, 2025, Reuters:
"New SEC guidance hits the Big 2, BlackRock and Vanguard"
[Considering adaptations to new reporting rules for shareholder
engagement]; see also March 3, 2025,
Reuters:
"Vanguard resumes stewardship meetings after reviewing SEC guidance"
[Fund
managers adopt legal disclaimer statements to conduct their corporate
engagements]
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March 12, 2025, Semafor:
"‘Incompetent:’ Jamie Dimon unloads on proxy advisor ISS"
[Prominent investment market leader questions reliance on
professional proxy voting advice]
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March 17, 2025,
TheCorporateCounsel.net: "Corp Fin Addresses Common Questions
on New 13G Eligibility CDI"
[SEC Staff explanations of new policy for large investor engagement
with companies]
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March 29, 2025, Maia Gez, Scott Levi,
and Michelle Rutta of White & Case LLP posting in Harvard Law
School Forum on Corporate Governance: "''Under Pressure':
Walking the Fine Line of Section 13(d) Passive Investor Status"
[Professional analysis of the new rules of engagement]
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March 31, 2025, Ray
Garcia, Matt DiGuiseppe, and Ariel Smilowitz of
PricewaterhouseCoopers LLP posting in Harvard Law School Forum
on Corporate Governance: "'2025 Proxy Season Preview: A New
Paradigm for Investment Stewardship" [Professional analysis of
evolving investor and corporate engagement]
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April
16, 2025, Pierluigi Matera of Link Campus University of Rome and Boston
University, posting in Harvard Law School Forum on Corporate
Governance: "AI, Identity-Driven Shareholder Activism, and the
Future of Corporate Governance" [Academic thoughts on activist
and management use of technologies to control rising interest of
individual investors]
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To
download a printable copy of this report, click
here. |
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Inviting Proposed Methods to Support Shareholder Voting
by Owners of Capital
Two observations have become clear in the widely reported projects of
several major fund managers to allow their investors – the ultimate
owners of the capital – to determine proxy voting choices for their
corporate stock holdings:[1]
1.
The
interests and efforts of these fund managers have encouraged the
development of both effective technologies and sources of required
advisory services that can now reliably support the engagement of a
fund’s individual investors in voting decisions.
2.
Very
few of the investors in these funds care enough about how their stock
holdings are voted to bother providing their instructions.
Forum participants interested in addressing the apparently
unanticipated but not entirely surprising challenge of engaging
individual investors in decisions about the use of their capital are
encouraged to offer their views and any practical suggestions.
Although there are no plans to establish a formal Shareholder Forum
program to address this specific element of our long and continuing
attentions to “retail” engagement ,[2]
I will report views either with or without identified attribution
according to participant direction, following Forum privacy policies.
GL – October 7, 2024
Gary Lutin
Chairman, The Shareholder Forum
590 Madison Avenue, New York, New York 10022
Tel: 212-605-0335
Email:
gl@shareholderforum.com
[2]
For past attention of Forum participants to the engagement of
ultimate owners in the use of their capital, prior to the
recent development of interest in “pass-through” voting, see
§
July 16, 2010, E-Meetings Review,
Focus Report: “Testing the Communication Tools”
(a publication of the Forum's 2010
"E-Meetings" program,
later summarized in
September 30, 2010, Forum Report:
Standards for Fair Conduct of Shareholder Meetings Using
Electronic Communications)
§
July 11, 2012, Reuters: "Shareholder website closing,
cites complex voting rules."
§
December 20, 2012, Forum Report:
Adapting to a Consolidation of Communication Services
§
June 12, 2018, Lucian Bebchuk, Alma Cohen, and Scott Hirst of
Harvard Law School posting in The Harvard Law School Forum
on Corporate Governance and Financial Regulation: "Index
Fund Stewardship"
§
November 29, 2018, John C. Bogle, published in The Wall
Street Journal: "Bogle Sounds a Warning on Index Funds"
§
December 26, 2018, John C. Wilcox of Morris Sodali: Comment
letter to the U.S. Securities and Exchange Commission relating
to its Roundtable on the Proxy Process
§
January 31, 2019, CorpGov.net: "Internet Will Drive
Public Opinion and Proxy Voting to Reflect American Values"
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