Imagine only 11 percent of people vote in an election. Imagine the perverse incentives that society would create. Now realize that, for the largest corporations that drive our economy, that is exactly what is happening.
While retail investors, everyday citizens, own roughly 70 percent of the wealth of public companies, fewer than 11 percent of retail accounts use their shareholder rights to vote proxies. Actual participation is even lower because most citizens invest through mutual funds, without direct access to their voting rights.
“While ‘retail’ investors, everyday citizens, own roughly 70% of the wealth of public companies, fewer than 11% of retail accounts use their shareholder rights through voting proxies.” — Patrick Reed, Stake #ProxyPreview”
Worse, special interests are trying to squash shareholder rights. In the past couple of years, industry front groups have attempted to restrict shareholder participation, and block discussion of environmental, social and governance (ESG) issues. Their main argument is that, since participation is so low, people must prefer ESG inaction.
We know they are wrong. The problem is not that people don’t care, but rather that few realize their power as shareholders. Over half of American adults own stocks or funds, and it’s time to embrace that ownership.
If you own shares in a fund or a company, you have a stake. You have rights to a say in what the company does. We founded Stake to address this imbalance between shareholder desires and shareholder participation. Our goal is to build a movement of active citizen investors.
Stake marries the power of shareholder engagement with the accessibility of online petitions. You can sync your investment accounts to support “Asks” for your companies to improve on social and environmental issues, many of which are raised in shareholder proposals such as greenhouse gas emissions, corporate lobbying, sweatshops and gender pay gap, in real time. Asks also can raise concerns beyond the limits of formal proxy ballots. Companies care about their investor’s opinions, no matter the venue.
This design enables shareowners to reclaim their voice within mutual funds, where they don’t even get the chance to vote company ballots. When fund managers like Vanguard don’t hear from their 20 million investors, they default to inaction on many ESG issues. On Stake, anyone can support an Ask of their mutual funds—to support a cause, change a policy or vote for specific shareholder proposals.
To maximize impact, we pair popular Asks on Stake with experienced sustainable and responsible investor (SRI) “Champions,” who have the know-how to engage with funds or companies. As these Champions negotiate with management, they can keep supporters updated on progress. Everyday retail investors don’t have the time or the connections to travel and meet with company management, but Champions do.
Our vision is a world where, when people read the news, they think of how their investments relate, and take action. Any time of year. Shareholder engagement must become a simple verb, no less natural than tweeting.
Thanks to the great work of the SRI community, more shareholder resolutions are making progress than ever. Yet, such progress is under threat
To achieve a society where companies are held accountable to the values of the public, the public needs to hold their companies accountable. It’s simple.
