Just 13.5 percent of funds vote their own proxies, with the majority, 72.3 percent, passing the responsibilities on to money managers. Funds are often understaffed, but that’s not the main reason they tend not to vote their own proxies. In fact, only 17.6 percent of respondents say time constraints are the reason they don’t always vote. More than one third say they believe that voting doesn’t make a difference. It’s a skeptical crowd.
In recent years several large funds have taken steps to influence social policy. The New York State Common Retirement Fund, for example, began selling shares of tobacco stocks in the mid-to-late 1990s. But only 4.2 percent of funds polled say that they have ever tried to place an issue on a proxy ballot, and just 1.6 percent indicate that they have ever voted in favor of a social issue.
Nearly half of the funds that have never placed an issue on a ballot say they would rather sell their stock than take an activist role in corporate affairs.
Pension funds have a fiduciary responsibility to invest assets as a prudent investor would. They could thus find themselves liable if a socially motivated action proved costly. Respondents unanimously say that social issues are not a shareholder’s responsibility. Of the funds that do vote their own proxies, nearly three fourths have a specific employee for whom voting is a major responsibility. Almost 80 percent of funds indicate that they usually vote with management.
