there are several questions in Ethics sections on proxy voting. What is proxy voting?
http://www.investopedia.com/articles/basics/04/082704.asp This may help. EDIT: Kevin beat me to it^
http://www.investopedia.com/articles/basics/04/082704.asp investopedia provides a very clear explanation. EDIT: I am really slow.
http://www.investopedia.com/articles/basics/04/082704.asp EDIT: I am a snail… - Dinesh S
I’ve read that article already but it seems like in Ethics section proxy voting is used in a different context. It seems like investment team members vote before major portfolio decisions.
Usually where a Quorum is required for Shareholders to take action for the company, a proxy is derived where you give the power of someone to vote. Rights of Shareholders is the Right to Vote. Generally, One vote for EACH share of stock owned, unless provided otherwise in Articles; and, only shareholders can vote. Quorum is usually defined, but it is typically 51% of those eligible to pass a resolution. The question is, how do you make sure that 51% - A proxy is required. Thus, a shareholder can appoint someone else as shareholder’s agent to vote at the shareholder’s Meeting. Note that it is unlawful to solicit proxy through interstate commerce (mail).
I got it. investment professional can vote on behalf of the shareholders for whom he manages portfolios.
Here’s the policy, from p.55, FYI. “Part of a member or candidate’s duty of loyalty includes voting proxies in an informed and responsible manner. Proxies have economic value to a client, and members and candidates must ensure that they properly safeguard and maximize this value. A fiduciary who fails to vote, casts a vote without considering the impact of the question, or votes blindly with management on nonroutine governance issues (e.g., a change in firm capitalization) may violate this standard. Voting of proxies is an integral part of the management of investments. A costbenefit analysis may show that voting all proxies may not benefit the client, so voting proxies may not be necessary in all instances. Members and candidates should disclose to clients their proxy-voting policies.”
thanks, hiredguns1. that’s a perfect description.
maratikus Wrote: ------------------------------------------------------- > I got it. investment professional can vote on > behalf of the shareholders for whom he manages > portfolios. Thats right. It can be a substantial time taken for a advisor to reserach all the proxies necessary for clients. As hiredguns post indicates, this is not a duty to be taken lightly.