WHEREAS shareowners should have the right to vote any way they want (except for buying and selling votes);
WHEREAS many individual shareowners lack the time and expertise to make the best voting decisions themselves, yet prefer not to always follow directors’ recommendations, because of possible conflicts of interest;
WHEREAS several institutional investors now publish their voting decisions more than one week before each company’s voting deadline;
THEREFORE BE IT RESOLVED that Visteon Corporation shareowners request the Board of Directors to study and report on the feasibility of enabling shareowners to conveniently imitate an institutional investor’s voting decisions, on all matters put to shareowner vote except director elections. (Director elections are excluded here to satisfy SEC rule 14a-8(i)(8).). So for example, besides being offered a convenient choice of voting the entire proxy as the Board recommends, perhaps shareowners could be offered a similarly convenient choice of voting the entire proxy (except director elections) the same way Domini Social Investments votes its shares.
Supporting Statement:
Institutional investors that publish their voting decisions on the worldwide web include:
- CalPERS (California Public Employees' Retirement System) at www.calpers-governance.org/alert/proxy
- Calvert Group at www.calvert.com/planning_2627.html
- Domini Social Investments at www.domini.com/shareholder-advocacy/Proxy-Voting
- MMA Praxis Mutual Funds at www.mmapraxis.com/corporate/proxy_voting_set.html
- Ontario Teachers' Pension Plan at www.otpp.com/web/proxyvot.nsf/proxyvotes?openform
- Pax World Fund at www.paxfund.com/proxyvote4.htm
In particular, Domini Social Investments published its voting decisions for last year’s Visteon Corporation proxy.
In the proponent’s opinion:
- One of the main reasons for having shareowner voting at all is that there would be conflicts of interest inherent in leaving all decisions to the Board.
- Simply following the Board’s voting recommendations does little to counterbalance such conflicts.
- Introducing competing sources of convenient guidance for individual shareowners could help make voting more independent of the Board.
Example of shareowners’ lack of time and expertise: http://boards.fool.com/Message.asp?mid=19682916 : “I tried to read the proxy statement, but I still don't understand whether the change is shareholder friendly or not.”
Evidence of shareowners’ mistrust of boards: Harris Poll, September 2003, at www.sec.gov/rules/proposed/s71903/gmcentee092403.pdf : “Support for corporate management nominees is also mixed with majorities of shareholders having withheld support from a management nominee.”
The conflicts of interest among managers, directors and shareowners are described in Robert Monks’ and Nell Minow’s 1996 book Watching the Watchers, along with shareowners’ “free rider” and “rational ignorance” problems.
The potential benefits of this proposal are discussed in the article “Vote Your Stock” on the web at www.corpmon.com/publications.htm .