The 20 largest U.S. fund providers voted for 40% of 48 key shareholder resolutions on diversity, inclusion and social justice issues, according to a manager research report released Monday by Morningstar Inc.
In 25 of the resolutions, investors sought information about workforce diversity of a company's workforce, board and senior management, gender and racial pay equity, and promotion patterns.
Thirteen of the resolutions asked about mandatory employment arbitration provisions, workplace sexual harassment prevention, working conditions and supply chain forced labor, while 10 key resolutions sought more board transparency into political lobbying and how they worked to prevent negative social impacts.
Among the 20 largest funds, TIAA Funds ranked first, supporting 35 of 47 resolutions voted across its funds, while Columbia Threadneedle supported 28 of 46 resolutions its funds voted.
Morningstar also found that three of the five largest fund companies —Vanguard, BlackRock and American Funds — were among the five least supportive of the 48 key resolutions.
The report also examines how a new Securities and Exchange Commission rule could limit shareholders' ability to address racial inequality in resolutions in 2021 and future proxy seasons. It noted that stronger backing by the largest asset managers would help keep these issues on proxy ballots and help determine whether a resolution qualifies for resubmission in 2022.
The analysis came from studying resolutions brought to vote at hundreds of companies from July 2019 to June 2020, looking at 48 resolutions with a strong bearing on racial inequality. Funds offered by the 20 largest fund companies represent 76% of the U.S. fund market and control nearly $16.5 trillion in assets, including $8.6 trillion in U.S. equities.
