Thank you for your important editorial, “Winning over proxy voters” (Pensions & Investments, May 12), 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 of 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 Institutional Shareholder Services Inc. voting platform can simply tell ISS they want to disclose like Florida State Board of Administration. Funds using the Glass Lewis & Co. platform can say they want to disclose like California State Teachers' Retirement System.
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 10 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 semiautomatic 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 up the arrival time when retail investors will be able to vote their values with the simple push of a button or two on their cell phones.
Publisher, Corporate Governance
Elk Grove, Calif.