The title of this post is a question I hear when I talk about proxy voting and corporate governance to individuals not “in the game” so to speak. Among those in the field of corporate governance and shareholder activism, the answers come rapid fire: “Good corporate governance improves shareholder value,” “Executive compensation is out of control and needs to be reeled in,” ” Voting is a fiduciary duty.” and so on. But when the question is posed to individual investors, there is silence, at best. More likely, I hear comments like, “I throw mine away,” or “It doesn’t matter. If I really don’t like what a company is doing, I sell my shares and move on.” While these comments are anathema to the views of those of us involved in the field of corporate governance, the rest of the investing world couldn’t care less.
It strikes me that the problem lies, in part, with the way many investors view voting and investing in general: They are in it for the money. Okay, some investors have a conscience, want to make sure that their companies “do the right thing” and so on, but at the end of the day, most investors just want a return on their investment. Herein lies the problem: There is a real disconnect between investing and proxy voting. To my knowledge, nobody has made a compelling case to individual investors to vote their proxies as part of the investment process.
This problem is demonstrated in the numbers. Voting by individual shareholders, always a low figure (in the low double digits, I believe) has plummeted in recent years as more companies deliver proxy materials to their shareholders via the Web. I recently heard a number bandied about suggesting that individual voter turnout at American corporations hovers around 5%.
Am I wrong here? Can anybody make the case for why proxy voting provides value for individual investors? The tired, “corporate governance is good” arguments are fine but they don’t motivate shareholders to act. What’s in it for Joe Hubcap to open the blue plastic package and read and understand a torpid proxy statement then make a decision about the issues when dinner is getting cold and American Idol is about to start?Why Should I Vote My Proxies?W
The following article by Steven Greenhouse appeared in Tuesday’s New York Times:
Recently the DC-based group International Labor Rights Forum informed those concerned with global labor rights, that IKEA, Wal-Mart, Target and Kohl’s are passively watching as union-busting is taking place at a Turkish supplier factory.
Recently the Burma Campaign UK, a group that works for the promotion of human rights, democracy and development in Burma, announced a major victory. QBE Insurance has announced it has cancelled insurance it provided to Burma and is to cease providing insurance to companies operating in the country. QBE is the largest managing agent at Lloyd’s of London and describes itself as “Australia’s largest international general insurance and reinsurance group”.
An innovative idea is taking root in many European cities. An alternative currency called NU allows citizens to use a card in connection with energy-efficient upgrades. Once someone gets rolling with it, they accumulate more and more credit that can be used to buy further green goods. It is a sort of reward system that is a true benefit to those who take advantage of it. And this, in turn, benefits the environment.
Bachmann is giving Ann Coulter a run for her money. B for bizarre. B for bending the truth. B for…bingo! Of course Obama is responsible for the Swine Flu outbreak. Thank you Congresswoman Bachmann for pointing that out, or at least insinuating it, you dominatrix of insinuation!
