First, today's investors purchase many more foreign shares, but typically vote only in their home countries. Even when local custodians cast discretionary votes, their positions would not be informed by the foreign investors’ instructions;
Second, issuers of ETFs, derivatives, and other financial innovations often accumulate actual, underlying shares only to hedge their issuances. Those intermediaries are often indifferent to their associated voting rights and cast default votes with management;
Third, many arbitrageurs and index managers are passive, cost-sensitive investors who are unaffected by the performance of the corporate issuer. Those investors are not motivated to bear the research costs to vote knowledgeably on the enormous long positions they accumulate;
Fourth, regulators have curtailed broker discretionary votes to reduce distortions in the perceived support given to directors and initiatives.
Fifth, the growth of securities finance has reduced the record-date holdings of margin customers and institutional securities lenders, which reduces the number of shares they can vote at the annual meeting.