Domini’s leadership in proxy voting was recently recognized by RiskMetrics Group, with the launch of its “Governance Policy Exchange” (registration required), a new section of the company’s website that highlights select institutions’ voting policies. RiskMetrics, which merged in 2007 with CFRA and Institutional Shareholder Services (ISS), provides risk management and corporate governance products and services to financial market participants. (Domini and many other investment managers use RiskMetrics for proxy voting services.)
According to RiskMetrics’ press release, “the initial participants … include these leading institutions, known for their views on issues like board accountability, executive compensation, capital restructuring and shareholder rights: TIAA-CREF, Morgan Stanley Investment Management, Domini Social Investments, the California Public Employee Retirement System (CalPERS), and the Connecticut Retirement Plans & Trust Funds.”
The RiskMetrics website provides access to each institution’s voting policies, a feature that allows visitors to easily compare policies and audio interviews with Policy Exchange participants.
“Domini believes that proxy voting is a powerful and underused tool for corporate accountability,” said Adam Kanzer, managing director and head of shareholder activism at Domini Social Investments. Domini has published its voting guidelines regularly since 1992, and in 1999 became the first mutual fund manager in America to publicly disclose its proxy votes. In 2001, Domini petitioned the SEC for the rule that now requires all mutual funds to publicly disclose its proxy voting policies and actual votes.
According to data from FundVotes.com U.S. mutual fund companies continue to overwhelmingly side with management when voting their proxies. The 54 fund groups surveyed supported approximately 90.7% of management proposals during the year ended June 30, 2007, but only 35.2% of shareholder proposals. By contrast, Domini supported 67% of management proposals and 63% of shareholder proposals for the same period, making it one of the most activist fund groups surveyed.