Jan. 30, 2020
Dear Sec. Countryman: Ideology is all well and good until it negatively impacts the investments and future stability of others. As the SEC investigates the proxy process and suggests rule changes to it, I’m sure the use of robo-voting by fund managers will be addressed. This is a key example of the ideology of a few impacting—negatively—the well being of many. The proxy firms dominate the overall proxy market, Institutional Shareholder Services and GlassLewis, ironically vote the shares in their control not in accordance with the market much of the time. By that I mean these firms are given to voting for an ideological agenda instead of one that capitalizes on market trends, and this is often to the detriment of those investing in these various funds. Ideological voting, some call it ESG voting, results in 43 percent lower returns for investors. I would say this flies in the face of a proxy’s fiduciary duty to maximize returns, but a proxy has no such duty; this is another matter I hope the SEC will address with any forthcoming rule change. I know the SEC has specifically undertaken a review to address robo-voting with the rules change under discussion. Increasing oversight on this issue so that proxy firms are no longer operating with ideological bias at the forefront will go a long way to returning a voice to individual investors. No detail is too small to consider the effects of when looking at such a broad and yet specific issue as the proxy process and the impact it has on investors’ futures. Sincerely, Kenneth Cook League City, TX