Broadridge to Expand Pass-Through Voting
Broadridge Financial Solutions announced it is advancing pass-through voting capabilities across the asset management industry. The new feature will bring the ability to direct votes directly to millions of individual investors who own shares through funds, expanding shareholder engagement.
This latest move by Broadridge embeds pass-through voting directly into the electronic ballot, a significant step in reducing friction for individual investors. Previously, directing votes was a more fragmented process. Now, the option to set voting preferences appears immediately after an investor casts their vote on routine matters, streamlining engagement. Vanguard is the first asset manager to adopt this enhanced feature for its "Investor Choice" program. This program, the largest of its kind, already allows 22 million eligible investors holding over $3.6 trillion in assets to direct how their shares are voted. The partnership with Broadridge is set to simplify participation further for those holding Vanguard funds. The context for this development is the historically low participation of retail investors in corporate voting, with only about 30% of their shares being voted, compared to over 80% for institutional investors. This initiative aims to close that gap by making the process more accessible and integrated into existing platforms. Pass-through voting is gaining momentum across the industry as a response to the massive growth of index funds. With trillions of dollars in passively managed funds, there's a growing focus on how those large blocks of shares are voted on issues ranging from executive compensation to climate change. Broadridge's main competitor in the proxy distribution and tabulation space is Computershare. Other large asset managers like BlackRock have also launched their own pass-through voting initiatives, such as the "BlackRock Voting Choice" program, indicating a broader industry trend. Looking ahead, Broadridge CEO Tim Gokey has referred to these developments as part of a "quiet revolution" in corporate governance. The company is also piloting "standing voting instructions" with major corporations like ExxonMobil, which would allow investors to set default voting preferences.
