Are Institutional Investors Voting Proxies with the Correct Mindset?

The federal government is not now and has never been in the business of telling you how you should vote your proxies. But it seems that through regulatory creep, the government may have indirectly given the power to tell investors how to vote their proxies to someone else entirely. Regulating disclosures and mechanics by which we vote proxies is plainly within the scope of the Securities and Exchange Commission's mission. However, the federalization of proxy regulation may be driving institutional investors and investment advisers, to view their responsibility to vote on proxy matters with more of a compliance mindset than a fiduciary mindset. This compliance mindset has had the effect of entrenching proxy advisory firms solidly in the voting process and given them an outsized say in the way most proxy shares are voted. The federal government may not be dictating how institutional investors vote their proxies, but in a presumably unintended consequence, by regulation have given this power to proxy advisory firms.
Tuesday, July 16, 2013/Author: David Schwartz/Number of views (14244)/Comments (0)/