at the company’s annual meeting this year. Investors who object to the outcome are likely to simply sell their shares.
It’s possible that if retail investors really did have more power – say, if asset managers let their customers easily and digitally vote shares held via index-tracking funds – they would see the value in using it. That day is a long way off because regulators and technology have yet to catch up. Fink says he’s working on the problem, and Vanguard claims it has a similar goal too. In the meantime, the second-best arrangement prevails.
BlackRock, which has $10 trillion of assets under management, launched the scheme in October 2021, mostly limiting it to large institutions that invest in equity index funds and separately managed accounts, where a client puts their investments in a vehicle that BlackRock manages. Index-fund managers, which also include firms like State Street and Vanguard, are generally entitled to vote on behalf of customers who buy their funds, which they do using principles drawn up by so-called stewardship committees.
A group of 12 Republican senators on May 18 launched a bill called the Investor Democracy Is Expected Act, which would require investment advisors of passively managed funds to vote the way investors wish, and not at the manager’s own discretion. A Senate hearing is scheduled for June 14.Editing by Peter Thal Larsen and Amanda Gomez
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