Check the Facts: Funds Engage Actively on Corporate Governance
By Ianthé Zabel
July 19, 2013
ICI president and CEO Paul Schott Stevens recently sent the following letter to the New York Times:
Every mutual fund or other registered investment company is required by law to cast votes on proxy proposals in the interests of the fund and its investors. Generally, funds interpret this to mean that they should support proposals that will promote good corporate governance and increase the value of the funds’ investments, carefully weighing shareholder interests and fund objectives.
Contrary to the shopworn myths trotted out by Gretchen Morgenson (“New Momentum for Change in Corporate Board Elections” July 6), funds engage actively with companies on governance issues, both directly and through the proxy ballot.
Uniquely among institutional investors, funds also disclose each and every vote cast. ICI’s examination of more than 10 million fund votes cast from 2007 to 2009 shows, for example, that in 2009 funds voted nearly 60 percent of the time in favor of shareholder “say-on-pay” proposals. Such facts render Morgenson’s “do nothing” charges hollow.
Read ICI’s research to learn more about funds and proxy voting.
Ianthé Zabel is ICI’s deputy chief public communications officer.