Vanguard Group plans to test a pilot program next year that is designed to give retail investors more proxy-voting power.
In early 2023, Vanguard will "pilot a number of proxy voting policy options for individual investors to choose from in several Vanguard-managed equity index funds," according to a corporate statement posted on Vanguard's website Wednesday.
Vanguard added that it plans to "gather client and stakeholder feedback as we test this approach and explore the full range of options with respect to proxy voting choices for index funds."
Currently, the firm's investment stewardship team "casts proxy votes relating to portfolio securities held by Vanguard-managed equity funds," Vanguard explained in the statement. This team, Vanguard added, "will continue to play its role in promoting strong corporate governance, but we also want to assess ways to provide individual investors the opportunity to participate more directly in the proxy voting process."
In explaining the motive behind this pilot program, Vanguard noted that its clients have "diverse perspectives" and that a "growing number would like the option to weigh in on how their index funds vote on important proxy questions at the companies held in the funds."
As of Aug. 31, Vanguard managed $7.3 trillion in global assets, according to a Vanguard news release.
Some other big money managers have taken similar steps.
For example, on Oct. 13, Charles Schwab Investment Management, announced a pilot program under which it will poll fund shareholders to "understand their overarching preferences regarding key proxy issues."
"We want to better understand shareholders' views on important proxy issues, and we know more shareholders want to share their views with us and express their unique preferences through their investments," said Omar Aguilar, CEO and chief investment officer at CSIM, in a Schwab news release.
As of June 30, Charles Schwab Investment Management managed about $575.9 billion in assets on a discretionary basis and $34.4 billion on a non-discretionary basis.