More than 35 primarily US-based investment stewardship professionals responding to PwC’s 2024 Stewardship Investor Survey provided instructive insights on their US portfolio proxy voting and engagement. Among the many key takeaways:
Disclosure—From a disclosure standpoint, investors are most dissatisfied with management’s communication of how sustainability is connected to potential long-term growth, followed by the board’s approach to identifying new director candidates and the board’s approach to continuous education as shown here:
Engagement—The most salient factors weighing into investors’ decisions to engage with a portfolio company during the proxy season are identification of a material risk related to a proxy proposal and a significant ownership stake, whereas determinations of whether to engage in the off-season are most commonly influenced by the size of investors’ ownership stake, follow-up on proxy season issues, and ongoing low support for a voting matter.
Shareholder Proposals—The particular “ask” in a shareholder proposal’s resolved clause is the most important voting decision factor, followed by how the resolved clause is addressed in the investor’s voting guidelines independent of the supporting statement or proponent; however the proponent’s intent, reputation, and perceived political views also factor into the equation, as shown here:
Audit Firm Ratification—The identification of material control weaknesses outweighs other factors by a wide margin impacting a vote decision on auditor reappointment.
See PwC’s highlights.
This post first appeared in the weekly Society Alert!