Proxy Voting 101
How to Vote Your Shares
If you own even one share in a public company, you have a voice. Shareholders often file shareholder resolutions enabling all shareholders to vote at the annual meeting. Over the past 50 years, thousands of environment, social, and governance resolutions have broken new ground in fostering corporate policies and practices that reduce material risk for all stakeholders.
A proxy is the ballot containing all matters being put to a vote by the corporation. It includes board directors, CEO pay, choosing an auditor, shareholder resolutions, and other critical decisions. You can cast your ballot by mail, internet, or phone. As a shareholder, you can use your influence to express your values.
You can vote your shares yourself; institutional investors can use a proxy voting service like AS YOU VOTE.
The mechanics of voting is simple: check a few boxes online and hit submit; mark a paper ballot at home and pop it in the mail; or phone in and hit the number on your keypad. What matters is expressing your values with your vote. As You Sow publishes Guidelines every year to assist in this process. If you don’t vote, your broker may vote on your behalf and against your values. If you care about climate change, gender equality, ocean plastics, racial justice, or toxins in your food, you should tell companies with your vote.
Never voted your proxy before? Don’t worry, we have you covered.
Shareholder resolutions can create real change. Harness the power of the proxy to make sure your voice is heard.
What Can I do?
VOTE YOUR PROXY: If you own shares directly (not through a mutual fund), take the time to consider how to vote on shareholder resolutions. Either:
+ Instruct your financial manager to vote for you
At any time of the year you can instruct your financial advisor to vote on your behalf. Send your advisor a letter that references your accounts and describes how you would like your shares to be voted. To ensure your shares are voted along the most ESG-aligned way, you can instruct your advisor to vote the As You Sow Guidelines. If you are an institutional investor you can sign up to be a Broadridge client and subscribe to AS YOU VOTE. Here is an example of a letter of instruction:
Dear [ADVISOR NAME HERE],
Please send me a list of companies I am directly invested in and a report showing how my shares were voted last year. After I have reviewed these, I will instruct you as how to vote on shareholder resolutions, board directors, CEO pay, and auditors going forward. If there is any question or if my voting instructions are unclear, please vote my shares according to the following guidelines:
[SHAREHOLDER VOTING PREFERENCES HERE]
Sincerely,
[SHAREHOLDER NAME]
PLEASE NOTE:
You can make your voting guidelines as simple or complex as you desire. You could simply instruct your advisor to vote against management on every item, or YES on all Environmental, Social, Governance resolutions; or YES on specific issues and NO on others; or you can instruct your advisor to vote through one of several proxy voting services, like AS YOU VOTE, Proxy Impact, ISS, Glass Lewis, or Egan-Jones Ratings Company.
Knowing the date of last year’s Annual General Meeting (AGM) can give you an idea of when to expect a proxy statement, or when to expect your financial advisor to be in touch with you. Proxy statements usually come out a six weeks before the AGM. If you haven’t received a proxy by a month before the company’s AGM, contact your advisor or the company itself. If you elected to get it by email you just click on it and you will see that ballot and also all of your other ones as the control numbers are linked under your name.
If your financial advisor tells you they refuse to vote your shares for you, or that it is not part of the services that you have paid for, consider taking your business elsewhere.
+ Vote your shares yourself
If you receive proxy ballots in the mail, follow the instructions on the ballot. The typical process is to either fill out the paper form and mail it back; call a specific phone number to vote; vote by internet.
Note that companies have the advantage on proxy statements. The company may bury any shareholder resolutions in the back of the document; include only their opinion arguing against the resolution in an “Opposition Statement;” or “summarize” and possibly misrepresent the resolution up front to discourage you from reading it yourself.
Be sure to go to the resolution, read it, and decide for yourself. You can also contact the people who put the resolution on the ballot to learn why they think you should vote for it.
If you don’t get a ballot for a company you know you own, contact your financial advisor or the company itself about a month before the company’s AGM.
+ Hold your money manager and mutual fund accountable
You can’t control how shares in mutual funds are voted – when you invest in a mutual fund, you own a share of the fund, but the fund manager owns the underlying assets.
However, you can pressure mutual fund managers to vote for shareholder resolutions. Most financial managers vote with management which is not necessarily in the best interest of shareholders or the company.
To help change this, first find out how your mutual funds vote. Consider contacting the financial managers who run the mutual funds you invest in and request their voting record, or their policies on voting shareholder resolutions.
Next, ask them to vote for “Environmental, Social, and Governance.” If enough customers make this request, financial companies may begin voting in support of these resolutions that are designed to reduce corporate risk.
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