In October of last year, I wrote about the Department of Labor’s Interpretative Bulletin Relating to the Exercise of Shareholder Rights. In that post, Americans Must Not Vote, I noted that, “the U.S. Department of Labor issued and Interpretive Bulletin Relating to Exercise of Shareholder Rights for pension funds regulated by ERISA, the federal pension law. The crux of the ruling was that U.S. pension funds subject to ERISA may no longer vote their proxies if they want to avoid the risk of investigation and possible prosecution by the federal government.”
As the Obama Administration begins the task of cleaning up the mess left by the Bush Administration, we are witnessing a rejection of various regulations imposed on Americans in the name of ideology or cronyism. Within a few days of taking office, President Obama has directed the Department of Health & Human Services to repeal its infamous “Gag Rule” relating to organizations receiv
ing federal assistance from offering abortions. Yesterday, the Administration announced plans to allow states to set their own pollution emission standards – something that the Bush Administration resisted so as to placate big business.
As the 2009 proxy season rapidly approaches, it remains imperative that institutional investors, including pension plans regulated by the Department of Labor, be able to exercise their rights as shareholders. The financial calamity facing investors and other stakeholders necessitates that corporations and their officers and directors be held accountable. Without shareholder voices leading the way at this year’s spate of annual meetings, public company officials will get, in effect, a free pass with respect to their failed management. The Department of Labor will bear primary responsibility for this misdeed.
Can we vote yet? Time will tell.
Hear, hear! Let’s hope the Obama Administration rescinds or “clarifies” the misguided interpretive bulletin written under the influence of the Business Roundtable and the desire of these CEOs to remain unaccountable to shareowners.
Of course, pension and mutual funds DO vote. They are legally required to consider voting as a plan asset. Ignoring their voting power would be ignoring an important tool at their disposal that can add value to their funds. However, not all funds are voting in the best interest of their beneficiaries or fund owners. That is the real point.
I urge readers of Global Investment Watch to use Proxy Democracy to assist in their own efforts to add value. From Proxy Democracy, you can see how your funds are voting in comparison with others. Several funds are now reporting their votes in advance of shareowner meetings through Proxy Democracy, so you can now use the site to help you determine how to vote your own shares.
Those of you who want to go further can even use Proxy Democracy to set up your own list of “key votes” that can then be kept private or made public, rating all recorded fund votes based on your individual values. I hope readers will not only use this tool, but will urge their own pension and mutual funds to participate by announcing their votes in advance of annual meetings.
Can we influence the efficiency, effectiveness and ethics of corporations? Yes, we can, with the help of sites like Global Investment Watch and Proxy Democracy.
James
Thanks for your Vote for Global Investment Watch! It’s critical in these challenging times that investors have the ability to both vote and to initiate shareholder action at public companies. Reversing the chilling regulatory actions at the U.S. Department of Labor is a critical step in helping a class of investors to continue their efforts to challenge corporate management.