New research from asset manager Vanguard outlines investor perspectives on proxy voting.
Proxy voting allows shareholders to support governance standards in the manner they believe will protect and maximize shareholder returns.
The research finds that there is a strong desire by investors to participate in a proxy voting choice program. This allows index fund investors to select a policy that will direct how their proportionate shares vote on proxy ballots for companies held in their funds.
“At Vanguard, we believe long-term shareholders – including index fund investors – play a critical role in a healthy corporate governance ecosystem,” John Galloway, global head of investment stewardship at Vanguard, said. “Our research reinforces that investors are keen to make their voices heard and are looking for asset managers that will empower them to engage in the proxy voting process. Our Investor Choice program democratizes access to proxy voting, providing investors in index funds the ability to direct how shares associated with their financial interests are voted as they pursue their long-term financial goals.”
Specifically, 83 percent of investors said they believe it is important that asset managers consider investor preferences when casting votes for their funds. Further, 57 percent said they would participate in a program that would allow them to influence how their asset manager votes. Conversely, only 8 percent of investors said they definitely would not participate in such a program. In addition, 66 percent said they would participate in a proxy voting choice program offered through their employer retirement plan.
Among other findings, (58 percent noted that they would be more likely to invest in a fund that offers the ability to influence its proxy voting decisions, while 86 percent of investors might consider switching investment firms altogether for the ability to influence proxy voting.
The research also revealed that only 47 percent know that investment managers cast proxy votes on behalf of their investment funds with only 36 percent of investors under age 45 knowing that fact.
Vanguard Investor Choice, which launched in early 2023, allows some 4 million investors, their advisors, and retirement plan sponsors to make their voices heard on important shareholder matters at portfolio companies held in participating Vanguard funds.
Through this platform, Investors can select from a range of proxy voting policy options that determine how their proportionate fund ownership is voted at shareholder meetings.
The study was conducted from Feb. 28 to March 2, 2025, by Ipsos using its large-scale, nationwide, online research panel, KnowledgePanel. It polled a weighted national sample of 1,347 adults 18 or older living in all 50 US states and the District of Columbia, of which 1010 self-identified as investors.