Proxy Voting Explained

When you invest in a company, it makes you an owner. Ownership gives you a voice in how the company is run. The main way shareholders can make their opinions heard is by voting on shareholder resolutions at company meetings convened for that purpose.

So what is a proxy vote?

Public companies and some mutual funds hold shareholder meetings where key issues of business strategy or how the organization is governed are discussed. When it comes to certain issues, a proposal must be raised and presented for approval by shareholders. 

Attendees are asked to vote on issues that impact the future direction of the company or financial investment. If you can’t attend these meetings in person, you can still have your voice heard by using a proxy vote.

What kind of issues do shareholders vote on?

Proxy votes can address a wide range of issues. Proxy votes are often put forth to elect members of a company’s or fund’s board of directors. They can be used to give shareholders a say on corporate strategy or executive compensation. And shareholders have even used proxy votes to encourage companies to take on more environmentally or socially responsible business practices.

How do I know which items are on the ballot?

Companies and funds are obligated to inform their shareholders in advance of any vote. To make sure you are able to exercise your rights as a shareholder, you will receive proxy materials, by mail or email, that include important information like the meeting date and time, proposals to be voted on, explanation of the proposals and voting instructions.

Interested in learning more?

Go to shareholdereducation.com for additional information about the proxy voting process, the impact your votes may have and even how to cast a proxy vote.