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Jun 20, 2023 644 likes •722 views

Responsible Investment Requires a Proxy Voting System Responsive to Retail Investors* Presentation by Ian Robertson CFA Department of Continuing Education Smith School of Enterprise and the Environment *Forthcoming in Designing a Sustainable

SLIDE 1

Responsible Investment Requires a Proxy Voting System Responsive to Retail Investors*

Presentation by Ian Robertson CFA

Department of Continuing Education Smith School of Enterprise and the Environment

*Forthcoming in Designing a Sustainable Financial System: Development Goals and Socio-Ecological Responsibility, Palgrave McMillan, 2017

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Corporation

Economic rights Ownership rights

1 2 3 4

Investor Rights

Ian Robertson

Values Screening ESG Valuation ESG Proxy Voting ESG Engagement Ownership rights ESG Proxy Voting ESG Engagement

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Ian Robertson

0% 20% 40% 60% 80% 100% FY75 FY80 FY85 FY90 FY95 FY00 FY05 FY '10 FY '15

Figure 3. Proxies Voted by Retail Investors

Extrapolated between 1976 and 2008. Sources: SEC (1976); Broadridge (2015) Always + Sometimes Always Actual

Street name Diversification Media/Electronics Notice & Access

1 2 3 4 5

Rise of ESG & Responsible Investment

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Ian Robertson

Will My Proxy Be Voted?

Discount Brokerage Full Service Brokerage Portfolio Manager (RIA) Stock Mutual Fund Exchange Traded Fund (ETF)

1 2 3 4 5

No No Maybe Maybe Maybe Maybe Probably Not Probably Not Probably Not

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Ian Robertson

Discount Brokerage Full Service Brokerage Portfolio Manager (RIA) Stock No No Maybe Mutual Fund Exchange Traded Fund (ETF)

Recommendations

1 2 3 4 5

Fiduciary Fiduciary Client Objectives form Client Objectives form Integration of Ownership & Economic Reporting

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Ian Robertson

1. Owner / Operators
2. Major Owners
3. Minor Owners

(Retail) Property Rights

Figure 1. Stages of Capitalism

Adapted from R.C. Clark (1981); G.L Clark & T. Hebb (2004)

1 2 3 4 5

2. Business Managers
3. Portfolio Managers
4. ESG Proxy Voting

Figure 7. Stages of Capitalism: The Retail Ownership Gap

Adapted from R.C. Clark (1981); G.L Clark & T. Hebb (2004)

1. Owner / Operators
2. Major Owners
3. Minor Owners

(Retail)

2. Business Managers

3.1 Portfolio Managers Direct Interaction

4. ESG Proxy Voting

3.2 Retail Brokers ? 3.3 Discount Brokers Property Rights ? 1. 2. 3. Property Rights

Figure 1. Stages of Capitalism

Adapted from R.C. Clark (1981); G.L Clark & T. Hebb (2004)

2. 3. 4. Property Rights Trust Corporation (Democratic) Corporation (Plutocratic) Agency Issue Disintermediation Responsible Investment (Institutions) Responsible Investment (Retail)

Structures & Concepts

Robber Barons / Gilded Age Progressive Era Roaring Twenties Golden Age Neoliberalism ???

Eras of Capitalism