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Vanguard indicates more social activism ahead in evaluating companies

Published 09/01/2017, 08:16 AM
© Reuters.  Vanguard indicates more social activism ahead in evaluating companies
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  • Vanguard is calling on U.S. companies to improve their governance, and outlines new factors such as climate change and diversity that will take on added importance in its evaluation of companies.
  • In an open letter to boards and leaders of publicly traded companies, Vanguard Chairman and CEO Bill McNabb says "it is incumbent on all market participants investors, boards and management alike to embrace the disclosure of sustainability risks that bear on a company’s long-term value creation prospects."
  • According to newly released proxy records, Vanguard revealed that for the first time, it voted against Exxon Mobil (NYSE:XOM) management earlier this year to require the company to report on climate change; the fund company had not previously revealed its vote.
  • Vanguard also revealed that it voted against three Wells Fargo (NYSE:WFC) directors earlier this year.
  • Vanguard's views will not be ignored: In June, WSJ reported that Vanguard’s passive funds have at least a 5% stake in 468 companies in the S&P 500.
  • Now read: Is Exxon Mobil's 'Safe-Haven' Status Threatened?


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