Author Topic: Ethical Investing - Business Roundtable  (Read 291 times)

Sanitary Engineer

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Ethical Investing - Business Roundtable
« on: September 27, 2019, 06:30:33 AM »
I am reading the letters to this weeks Economist and they are discussing last weeks "Business Roundtable" article, which I missed. Did anyone else read this?
https://www.economist.com/leaders/2019/08/22/what-companies-are-for

Based on the discussion in this weeks letters, I had the thought that I should try to find to find the group of people that is doing what John Bogle advocated for and trying to find a method for index funds to participate in shareholder decision making.  I don't think I mean activists investment, but shareholders are often cited as the reason companies prioritize short term profits.  So maybe if there is a large contingent of index fund investors voicing the preference for long term sustainability and social and environmental responsibility over short term growth and profit, then that would make it easier for CEO's to make business decisions that don't maximize short term profit.

I don't know the numbers, but I am under the impression that index funds hold almost half of the "equities" market.

Do we (index fund investors) have a mechanism for participating in shareholder voting/meetings?  I don't know how these things work, because I always assumed I was too small a fish.  I don't actually want to participate, I just want to sign up for the version of VTSAX that has shareholder voting rules that line up with my philosophy (which is essentially Yvon Choinard's business philosophy).

Does anyone have links to Bogle or someone smarter than me discussing this topic? Or actual index funds that are trying to implement something like this?

There are couple other "ethical index fund" threads up now also - who else has had a thought like this, or remembers reading what Bogle has said about it?

seattlecyclone

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Re: Ethical Investing - Business Roundtable
« Reply #1 on: September 27, 2019, 12:31:47 PM »
Do we (index fund investors) have a mechanism for participating in shareholder voting/meetings?  I don't know how these things work, because I always assumed I was too small a fish.  I don't actually want to participate, I just want to sign up for the version of VTSAX that has shareholder voting rules that line up with my philosophy (which is essentially Yvon Choinard's business philosophy).

Not really. Each mutual fund company has complete authority over how they vote on shareholder proposals; I'm not aware of any that let their mutual fund shareholders vote on how the company will vote their shares. Vanguard has a document here explaining their general policies behind how they decide to vote on corporate issues. Not sure what the path is for us as investors to advocate for a change in these policies. I think that our right as Vanguard shareholders to force any sort of formal proposal and vote on things like this is very limited. It may be sort of a "vote with your feet" situation if some other fund gives its shareholders more of a say, but again I'm not aware of any that do.