U.S. Rep. Bill Huizenga (R-MI) has forwarded correspondence to a group of asset managers regarding how address fiduciary responsibilities.
Huizenga, chairman of the House Financial Services Subcommittee on Oversight and Investigations, sent letters to asset managers at BlackRock, Vanguard, State Street, J.P. Morgan Chase, T. Rowe Price, Prudential, Goldman Sachs, Fidelity, Capital Group Companies and the Bank of New York Mellon.
Asset managers play a critical role in influencing the businesses they own on behalf of their shareholders – presumably striving to add financial value for investors, he said.
“The lack of transparency surrounding the decisions asset managers make on behalf of millions of retail investors is concerning,” Huizenga said. “Companies who leverage their voting power to strategically vote on shareholder proposals with the intention of driving social and environmental policy change deviates from the primary focus of maximizing investor returns. Congress must understand how asset managers fulfill their fiduciary responsibilities to prioritize financial returns and act in the shareholder’s best interest.”
Within the letters Huizenga maintains it is important to understand how management firms balance environmental, social and governance (ESG) initiatives with making sound decisions on behalf of investors.
“Despite being labeled as a passive investor, asset management firms may be leveraging their voting power to drive environmental and social change, deviating from the primary focus of financial performance,” Huizenga wrote.
Huizenga has requested the financial entities supply responses to questions about fiduciary responsibility fulfillment.