Fund Firms Look to Level the Proxy Voting Field

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The term “shareholder democracy” is a bit of an oxymoron. When it comes to electing corporate boards, Wall Street has always been run as a plutocracy, with one share—not one person—equaling one vote. The wealthiest investors with the most shares control companies.

Historically, the average mutual or exchange-traded fund shareholder has fared even worse in this already unequal system, because fund management controls their votes. Vanguard Group, BlackRock (ticker: BLK), Charles Schwab (SCHW), and other fund companies are looking to change that. On Feb. 1, Vanguard announced it would be launching a pilot program for three of its ETFs— Vanguard S&P 500 Growth (VOOG), Vanguard Russell 1000 (VONE), and Vanguard ESG US Stock (ESGV)—that would allow retail investors some control over their votes this proxy season, which usually begins in the spring.