If we’re talking about a company’s directors, shareholders voting their proxies can change the fundamental direction of a corporation. In 2021, climate activists successfully staged a takeover of Exxon’s board. As for shareholder proposals, shareholders can focus corporate and media attention on environmental, social and governance (ESG) factors in corporate decision-making, and diversity, equity and inclusion (DEI) initiatives.
Importantly, it does not take a significant percentage of votes to send a message. The problem is most shareholders don’t know how to use their power.
Until now, shareholder voting came with pitfalls – particularly for shareholders opposed to “woke” politicization of corporate governance. For example, if you represent a large state pension fund handling many investors, how confident are you that your asset manager is focused on the bottom line and not a side hustle pushing ESG-friendly funds?
Or, if you rely on a big proxy advisor, are there any potential conflicts between their voting recommendations and their ESG ratings or consulting services? There is a reason why Congress “has subpoenaed shareholder advisors Glass Lewis and Institutional Shareholder Services (ISS) as it expands a probe into whether they have violated antitrust laws by coordinating ESG efforts with each other.”
Among other things, the subpoena “touches on shareholder advisors’ relationships with asset managers — including Larry Fink’s BlackRock, State Street, Arjuna Capital and Trillium Asset Management — and any communications that relate to setting an ESG agenda.”
Similar hurdles affect everyday retail shareholders who don’t have time to wade through all the individual proxies they receive, many of them 80 pages or more. They might not exercise their voting voice or default to voting with management, thinking that management has shareholder interests in mind.
But how many of those managers just returned from cheering the latest ESG panel at the World Economic Forum in Davos?
For shareholders suspicious of ESG, a recent study found the big three asset managers – BlackRock, Vanguard and State Street – support for ESG proposals in 2022 ranged from 21% to 50%. Support for “anti-ESG” proposals, better described as “pro-fiduciary-duty proposals,” ranged from 0% to 13%.
To the best of this author’s knowledge, support for center-right environmental and social (E&S) proposals was 0%. As for the two big proxy advisers, all one has to do is visit the Glass Lewis and ISS websites (here and here) to see they are all-in on ESG.
That’s why the National Center for Public Policy Research’s Free Enterprise Project (FEP) has launched its updated Proxy Navigator app, which includes a link to our new shareholder voting platform. Powered by iconik, pro-growth shareholders – be they individual retail investors, investment advisers or even large pension fund managers – can create an account on the app to follow FEP’s voting recommendations and auto-vote their shares.
To give readers a sense of FEP’s stance on relevant issues, consider its shareholder activism over the past year.
FEP submitted nearly 60 shareholder proposals in the 2023 shareholder season. Proposals addressing discriminatory DEI policies – such as seeking to require companies conduct a civil rights and non-discrimination audit to ensure employees not deemed to be “diverse” are not discriminated against – were submitted with the greatest volume.
Other proposals sought to protect civil liberties and address the problem of financial institutions “debanking” conservatives, assess the risks of decarbonization and net-zero emissions goals, expose business relationships with the Chinese Communist Party, push the addition of viewpoint nondiscrimination in their EEO-statement and confront attacks on the 2nd Amendment by the credit card industry.
FEP is on the front lines in the battle against “woke capitalism,” and now offers pro-growth shareholders an opportunity to more easily and efficiently use their votes to keep the pressure on corporations to return to political neutrality and focus on creating value for shareholders and the country overall.
In minutes, shareholders can set up their Proxy Navigator account to auto-vote their shares in alignment with FEP. This removes the biggest barriers to participation — time and context. The voting platform provides each investor with a personal dashboard maintaining an ongoing tally of election results. This automated voting service is free to those who sign up with FEP’s voting profile.
Shareholders who sign up to follow voting recommendations are still ultimately responsible for how their shares are voted. We are not investment advisors. But Proxy Navigator makes it very easy to adjust particular votes as desired, and announces any deviation from our default voting guidelines – typically with a full explanation.
We expect the vast majority of users will be very happy to just track our voting recommendations automatically – so they can get on with all the other demands of life, confident in the fact that their shares are being voted in their best interest.
Come join us in moving corporate America back to neutral here.
Stefan Padfield is an associate at the National Center’s Free Enterprise Project (FEP), whose stated goal is to oppose the woke takeover of American corporate life.
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