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When you invest in a company or purchase a mutual fund, it makes you an owner. Ownership gives you a voice in how the company or fund is run. The main way shareholders can make their opinions heard is by voting on shareholder resolutions at meetings convened for that purpose.
Shareholders can participate in the decisions that have a real impact on the long-term performance of an investment. Whether voting on proposals that help shape the strategic direction of a company or its management, or the weighing in on the investment mandate of a mutual fund, shareholders have a voice in how their assets are managed. This is why we tell shareholders to own your vote.
"Voting at shareholder meetings, generally via a proxy vote, is one way you can exercise your rights as an owner."
Public companies and mutual funds hold shareholder meetings where key issues on 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. While proxy votes are usually associated with public companies, mutual funds are organized as investment companies and have many of the same obligations and reporting requirements.
Shareholder meeting attendees are asked to vote on issues that impact the future direction of the company or fund. And while the majority of shareholders never attend these meetings, they are still able to have their voice heard by voting by proxy.
When you own a share of a company or a fund, you are an owner of that business. As a shareholder you get a vote in how it is run, in proportion to the amount of shares you own. The topics raised at shareholder meetings are not mundane issues. They are generally topics that have the potential to have a significant impact on the future direction of the company or fund. As a result, these topics can have a direct impact on the value of the shares you own, so it is in your best interest to make sure you have a say in these key decisions.
Proxy voting is not a difficult process. You just need to spend a little time to understand the issues and then take a few steps to submit your votes. The links here can provide you with more information about the process, the impact your votes may have and even how to cast a proxy vote.
| Common Corporate Shareholder Proposals | Common Mutual Fund Shareholder Proposals |
|---|---|
| • Approving mergers and large capital expenditures | • Shifts in the investment objectives or policies of a fund |
| • Mandating diversity in board membership and composition | • Mandating greater environmental or social screening of investments |
| • Approving key executive pay packages | • Changes to advisory fees charged to shareholders |
| • Adding worker protections | • Proposed fund mergers or closures |
| • Establishing targets to combat climate change | • Changes to the Investment Management Advisory Agreement or to Articles of Incorporation |
As a shareholder, you also have the right to introduce resolutions or proposals on any topic to company management and ask that they are voted on at the next shareholder meeting. In order to do so, you must meet certain shareholder ownership requirements established by the Securities and Exchange Commission.
For mutual funds, it is important to have a say in decisions that impact your investment in the fund. Voting your proxy can give you the opportunity to influence key issues such as changes to advisory fees, investment objectives and proposed fund mergers.