The Past, Present, and Future of Proxy Voting Choice

Abstract

This essay (prepared for the the JCL 50^th Anniversary Symposium) explores the past, present, and future of proxy voting choice. It first describes the emergence of voluntary pass-through voting programs as a response to concerns about the voting power of large asset managers. It next reviews the voting choice programs implemented at BlackRock, Vanguard, and State Street, as well as other developments on the horizon. The essay then examines the broader implications of these programs, including their potential to redistribute voting power, enhance the influence of proxy advisors, and challenge traditional norms of corporate governance. It concludes with open questions regarding the long-term effects of these programs on corporate governance, investor engagement, and the market for corporate influence.

Keywords: corporate governance, Big Three, institutional investors, proxy voting, index funds, mutual funds, passively managed mutual funds, pass-through voting