Vote, measure, manage.

By November 18, 2020News

By Kevin Thomas, SHARE CEO 

Shareholder proposals are a means for investors to engage not only with corporate management, but with other shareholders, raising suggestions and concerns that are relevant to the long term success of the corporation, and subjecting them to a vote by shareholders to demonstrate their importance.

Those proposals include concrete actions on climate change, diversity and inclusion, worker rights, and better corporate governance. Those proposals matter.

The number of shareholder proposals filed at Canadian issuers averages around 80 per year. In 2019, according to a new investor brief from SHARE, 80 proposals were filed nationwide. In 2020, 81 proposals were filed. Many of those proposals are withdrawn after constructive discussions between the shareholder and the issuer. In 2020, for example, 38 of the 81 proposals filed at Canadian issuers were withdrawn after such discussion. Usually, this indicates that board responses to those proposals were sufficient to address the concern without necessitating a shareholder vote.

However, that means that whenever a shareholder proposal is actually on the ballot, it’s critically important that shareholders vote on the issue one way or the other – it’s clearly a contentious point and shareholder sentiment could help tip the scales.

That’s why effective voting is such a critical part of investor stewardship.

Yet with the thousands of votes on the table at corporate meetings each year, ensuring that your fund clearly evaluates and votes consistently on shareholder proposals can be challenging.

If your investment committee or board is not sure how its managers are voting on the issues being raised by other shareholders, or how that voting record compares to other corporate governance leaders, management recommendations, or the positions taken by other major shareholders, you’re not alone.

The good news is that SHARE can help your fund analyze, evaluate and benchmark how every one of your votes is being exercised right now by your asset managers, using our unique Proxy Vote Audit Tool, giving you a clear line of sight on how to improve your voting practices.

With our audit as your baseline, your board can exercise effective oversight, governance and stewardship of one of the most fundamental shareholder assets – your vote.