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“Investing is about more than just making money. When you buy shares of stock, you’re not only getting the right to receive dividends and to benefit from any gains in the stock’s value,” according to Motley Fool. “You’re also buying partial ownership of a company, with all of the rights and privileges that go with it.”
Motley Fool’s David and Tom Gardner recommend ProxyDemocracy as a guide in exercising one of the most important shareholder privileges — voting a proxy ballot on corporate policy.
ProxyDemocracy helps you “look up your companies to see what issues are being voted on, get guidance on how you might want to vote and learn how your mutual funds have voted,” they write.
“Recent business scandals have led to cries for greater corporate responsibility — we shareholders must exercise our rights to participate in our companies’ governance. The best way you can be heard is by casting your vote.”
The Securities and Exchange Commission announced a series of steps to educate investors about proxy voting and support greater investor participation in corporate elections.
The measures include a “Spotlight on Proxy Matters” Web site that explains the proxy voting process in plain language. Among the site’s features are a section of frequently asked questions, a sample voting instruction form and alerts about new voting rules for 2010.
“Investor participation in elections at companies they own is critical to effective corporate governance,” SEC Chairman Mary L. Schapiro said.
“The right to vote in corporate elections is a key investor right,” said Lori Schock, director of the SEC’s Office of Investor Education and Advocacy. “We designed these new resources to help investors better understand the materials they will receive in connection with annual meetings of shareholders and how to vote by proxy in corporate elections.”
Moxy Vote, the new online voting platform, saluted ProxyDemocracy as one of the pioneers of the movement to empower shareholders.
Moxy Vote, designed to simplify proxy voting for individual investors, recognized “those who brought shareholder rights to the forefront of the investment scene. These folks continue to lead this charge even today.”
Moxy Vote singled out Andy Eggers, the founder of ProxyDemocracy, and Mark Latham, a member of both our board of directors and the Securities and Exchange Commission’s Investor Advisory Committee.
ProxyDemocracy brings scrutiny to the voting records of mutual fund companies, as well as telling retail investors how big institutions plan to vote at upcoming annual meetings, Moxy Vote said. In its short history, ProxyDemocracy has developed “a useful resource for investors.”
Those joining ProxyDemocracy on Moxy Vote’s roster of pioneers include Nell Minow of The Corporate Library and Jim McRitchie of CorpGov.net.
The U.S. Supreme Court decisionruling that struck down the government ban on political spending by corporations will shift the fight over campaign contributions to directors and shareholders, lawyer Theodore Olson predicts.
Olson, the former U.S. solicitor general, argued before the court for Citizens United, a nonprofit corporation that produced a 2008 film about Hillary Clinton, then a U.S. senator and presidential candidate. Citizens United’s plan to show the film on the cable television on-demand system was blocked by a federal law barring corporations from using general treasury funds for political advocacy. The Supreme Court overturned the law on January 21. Olson writes:
“The decision creates new corporate governance issues by shifting efforts to restrict corporate political speech from Congress to the boardroom. In Citizens United, the Supreme Court rejected the government’s argument that corporate political speech can be banned in order to protect dissenting shareholders from being compelled to fund political speech with which they disagree. In the aftermath of Citizens United, it can be expected that shareholders in some corporations will attempt to adopt measures restricting corporate participation in the electoral process and mandating disclosure of corporations’ political activities.”
ProxyDemocracy is among the shareholder-oriented Web sites that “are the beginning of Business 2.0,” the Financial Post said. These sites will provide the best leverage for shareholders seeking to bring transparency and accountability to corporate management.
Leaders of two state pension funds asked the Securities and Exchange Commission to prevent companies from opting out of a proposed rule that would allow shareholders to nominate directors in corporate proxy materials, Pensions & Investments reported.
Keith Bozarth, executive director of the $78 billion State of Wisconsin Investment Board, and Theresa Whitmarsh, who heads the $70.5 billion Washington State Investment Board, submitted letters to the SEC last week opposing any provisions to allow companies or shareowners to decide what access to proxy materials, if any, is appropriate.
“The recent economic crisis has highlighted the need for enhanced accountability of boards for their stewardship responsibilities,” Bozarth said in his letter. “Reasonable access to corporate proxy materials for long-term investors would address some of the problems surrounding director elections. Such access could significantly enhance the U.S. corporate governance model.”
Alexander Cutler, chairman of the corporate leadership initiative of the Business Roundtable and chief executive officer of Eaton Corp., told the SEC in August that, rather than an SEC rule, state law should prevail, allowing companies to decide on amending their corporate bylaws to provide for shareholder access, P&I said.
Click here for the full list of comment letters.
ProxyDemocracy is highlighted in Eliot Spitzer’s column on Slate, where he says technology could transform corporate democracy as much as it changed electoral politics in 2008. The former New York governor describes how stockholders can use ProxyDemocracy to inform themselves about corporate ballot items and see how institutional investors will vote at upcoming meetings. He also notes that mutual fund shareholders can easily see how their managers have voted on particular issues and can track those choices over time.
“ProxyDemocracy is the corporate equivalent of knowing how major editorial boards judged a political candidate,” Spitzer writes in “We Own You!’’
He notes that individual shareholders often sit out proxy elections; only one-quarter of the 25 percent of shares held by individuals are voted. Technology — especially services like ProxyDemocracy’s — could be the answer, he says:
“In the long run, reinvigorating corporate democracy is almost as important as reinvigorating political democracy. Much as we may believe that a new regulatory regime will fix our corporate sector, the more important levers of influence will, and should, come from the activities of shareholders, aided by new technology.’’