Voting Your Shares Starts to Matter

March 5, 2010 at 8:55 pm Leave a comment

 “What would happen if all the small investors banded together and cast their ballots during proxy season …?” the New York Times asks in an article that cites the contribution of ProxyDemocracy in educating shareholders. “How much of an impact would they have?”

It’s possible they could have more of an effect on corporate actions than ever, the Times says.

“More voter resources are beginning to sprout on the Web that aim to educate smaller investors, demystify the issues on the ballot and make voting easier,” according to the Times.

Organizations like ProxyDemocracy are helping shareholders to make decisions on issues like executive pay and corporate governance — and to increase their influence, writes Tara Siegel Bernard.

Individual investors own about 30 percent of outstanding shares, and have a much larger stake when their holdings in pensions and mutual funds are taken into account. While historically only a fraction of retail investors have voted their proxies, they do have the power to sway results, especially in close contests.

“Thirty percent of outstanding shares is a substantial portion, easily enough to change the outcome of many proxy voting results,” Mark Latham, a member of ProxyDemocracy’s board of directors, told the Times.

Nell Minow, co-founder of The Corporate Library, is quoted as saying that small stockholders should research how activists, such as the California Public Employees’ Retirement System, plan to cast their ballots.

Reporting how respected institutions will vote is one of the core services delivered by ProxyDemocracy. And Calpers is one of the key members of our roster of early vote disclosers.

The article points out how investors could benefit from changes in policy implemented or contemplated by the Securities and Exchange Commission and Congress. 

They don’t have to wait to help themselves, however. Mutual fund holders, whose managers vote proxies on their behalf, can shop around to find those that do the best job of voting their interests, Latham said.

“The biggest thing you can do is find a better mutual fund,” he said. “If you are in a Standard & Poor’s 500 index fund, there are many S.& P. 500 funds. But some vote better than others, and that is the biggest leverage you have.”

Comparing the voting records of funds is another of our key services. Go here to see how your fund votes.

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Entry filed under: mutual funds, press, progress, ProxyDemocracy. Tags: , , , , , , , , , , .

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