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 Vanguard, which has $3 trillion of assets under management, is
making the change as activist investors pressure top shareholders to
take a more vocal role on questions of corporate governance. It
follows the lead of BlackRock Inc, the world's largest asset
manager, which ramped up its publishing of similar reports last
year.
"We have said for a long time that engagement is important for us,
and we want to provide more context around that," Glenn Booraem, who
overseas corporate governance for Vanguard, told Reuters in a
telephone interview.
He said his company will describe on its website as early as this
week the reasoning around five or so recent cases in which it raised
concerns about board actions, or voted against executive pay plans,
and some changes that followed.
Like BlackRock, Vanguard will not name specific companies in its
commentaries. Booraem said the goal is not to pressure companies but
rather to show investors how Vanguard advocates on their behalf.
Even so, the action will put company directors on notice, said
Jonathan Macey, a Yale Law School professor. "It's like when the
teacher says, 'I know who you are,' the message gets across," Macey
said.
While mutual funds already disclose proxy votes, they have lately
faced activist pressure to become more vocal about how they feel
about issues like executive pay and corporate director leadership.
Among the critics is Vanguard founder John Bogle.
So far, BlackRock has posted two quarterly reports on its website
providing more detail on votes it cast or talks it held with dozens
of companies worldwide.
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Michelle Edkins, who oversees BlackRock's governance programs, said
the firm wanted to provide more transparency to clients. The reports
left aside company names, Edkins said, to strike "a reasonable
balance between informing our clients about our governance program
and maintaining constructive relationships with companies."
Nonetheless, BlackRock's reports offer enough specifics to allow
investors to identify the likely subjects. In one, BlackRock said it
raised concerns with "a global retailer after allegations of bribery
surfaced at the company," and that it voted against certain
directors and opposed a number of management recommendations.
The descriptions match filings showing how BlackRock funds voted at
Wal-Mart Stores Inc, which faces bribery investigations.
A Wal-Mart spokeswoman declined to comment.
(Reporting by Ross Kerber; Editing by Richard Valdmanis and Leslie
Adler)
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