July 09, 2009
Canadian Mutual Funds Continue to Vote Against Shareowner Proposals
by Robert Kropp
Study finds that SRI funds offered by mainstream fund companies vote in favor of management, even
on core ESG issues.
A recently published study by the Shareholder
Association for Research and Education (SHARE) and Fund Votes found that while Canadian mutual funds were more likely
to oppose management nominees for boards of directors in 2008, the majority of mutual funds
continued to vote overwhelmingly in favor of management proposals, and against proxy items proposed
The report, entitled Proxy Voting by Canadian Mutual
Funds, analyzed votes cast on 5,560 proxy ballots of 178 companies, by 154 funds in 21 fund
families that collectively manage 85% of mutual fund assets under management in Canada. Included in
the analysis were the voting patterns of 31 socially responsible investing (SRI) funds in 9 fund
According to the report, "most Canadian mutual fund families continue to vote in
a management—friendly manner." Of the fund families analyzed, Fidelity supported less than 2% of
shareowner proposals, the smallest percentage in the study. Other mutual fund families whose
support for shareowner proposals was very low included AIC and Mclean Budden.
found that three SRI funds—Inhance, Meritas, and Northwest & Ethical—supported shareowner proposals
at least 40% of the time, and voted against management proposals on at least 20% of proxy ballots.
However, when it came to the voting patterns of SRI funds sold by diversified fund
companies, the report found that proxy voting patterns were the same as in mainstream funds offered
by the same companies. "This is often the case even for shareholder proposals asking companies to
be more attentive about the impacts of their operations on human rights and the environment," the
Laura O’Neill, SHARE’s Director of Law and Policy, said, "When you invest
in a fund from an SRI family, you can count on very progressive proxy voting. We found that in most
cases, an SRI product managed within a non-SRI fund family votes in the same management friendly
way for all its funds."